Do YOU understand what is "Financial Planning"?

We can't deny that everyone of us can't runaway from financial matters, thus, planning it wisely would put you on a better path to achieve financial goals as desired. Does this called "financial planning"? Hmmm... Many people think that financial planning is for high-income earner and the rich. But is this true? If not, what is it actually?

Generally, financial planning is a journey to achieve financial goals set with a comprehensive and systematic step-by-step process. It involves taking a broad view of one's financial affairs covering many areas of wealth management.

What's Included in Financial Planning?

  1. Cash Flow management:
    • assessing your current financial net worth
    • budgeting
    • debts eliminations
    • building savings

  2. Insurance planning
    • ensuring that our assets and family are well protected by having adequate insurance coverage

  3. Investment planning
    • this is the wealth accumulation step, whereby investing a portion of your savings with the aim of getting a higher return.
    • an investment strategy is needed to ensure greater success

  4. Tax planning
    • this is an area largely ignored or forgotten by most tax payers
    • it involves strategies to optimize our income, including from investments, by legally minimizing the tax payable.

  5. Retirement planning
    • this is crucial to ensure that your golden age won't be miserable
    • start planning as young as possible, the better

  6. Estate planning
    • writing a will is the most common steps in this stage
    • ensuring that your estate will be passed on to your beneficiaries, as you desired, smoothly and to avoid family disputes

The 6 steps of financial planning
According to licensed financial planner, Alex Yeoh (email:, a solid financial plan should be more than just buying an insurance plan or having some unit trusts. It should cover 4 key areas, namely wealth management, wealth protection, wealth accumulation and wealth distribution.

The next question is: "Who should you sit down with to discuss financial planning?"

Stay tune for more...


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