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“Most
individuals do not achieve their financial objectives,
not because they plan to fail, but ‘simply’
they fail to plan”.
According to recent market research in the
UK, over 93% of people who live to retirement
will be financially dependent on state benefits,
family and charities.
Regardless of your current financial position,
you should plan for your future financial objectives.
Every successful individual and business will
have a short, medium and long-term plan.
A short-term plan usually refers to rainy day
money for emergencies. For example, you should
not have stocks and shares. Reason being, if
the investment drops in value it would not be
prudent to withdraw it, plus it might take some
time to recover.
A medium-term plan might refer to a house purchase
in the next four to five years. Therefore, you
cannot have high-risk investments, just in case
the value drops sharply before you need the
funds, again it might take time to recover the
loss.
A long-term plan might be for your retirement.
It would not be economical to invest in cash
or other low yielding investments due to the
possible effects of inflation. Therefore, an
investment that can produce returns in excess
of inflation would be more suitable.
Planning and the way it is done are very important!
When done professionally, it helps you make
the most of your money, helps you sort out your
priorities, and work towards your goals and
prepares you for unexpected financial shocks.
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