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.