Hi Guys, Welcome back! This is Thomas!
Better Mindset | Better Life!
What do you want to achieve financially?
Like getting a place? or going on a very nice vacation?
Have you written it down and plan when are you going to achieve them?
Research shows 43% of people give up on their new year’s resolutions by February
so in the next five minutes,
I want to share 4 steps to plan for your financial goals!
If this is your first time here,
My name is Thomas C Chan
and this channel is about financial growth by sharing knowledge, habits, and mentality
If you like my videos,
make sure you give me a thumbs up, subscribe and hit the bell
so you won't miss any important information.
Before you start planning, you need to have couple things ready
A pen, paper
And 30 minutes of quiet time which means No cell phone or no disturbance.
A time for you to clear your mind and think.
The first step is to about what do you want to have financially.
Say getting your dream place.
Write it down. Then think about the detail of this goal
Are you looking for a house? Townhouse? Apartment?
Where do you want to have this place?
Roughly how much will this place cost?
At what age, do you want to have this place?
And most importantly, WHY?
Why do you to have a place? Is it For family? For your own achievement?
Write it down and give emotion to it.
The next step I called Know Your Money
What is your Income? Before Tax and After Tax?
What is your monthly expense?
From coffee to mortgage payment. Write it all down.
What kind of asset do you have?
Like saving account, stock accounts, rental properties.
Things that can bring extra cashflow to you.
On the other hand, what kind of liabilities you have?
Such as credit card debits, mortgage, car loans?
Things that take money away from your bank accounts
And lastly do you have any emergency fund?
If you have to stop working for 3 months, where you going to take money from?
If the Cashflow is positive, Great! Then we can move on.
If it’s negative, then see is it because there is too much expense? Or too much debt?
What is your plan to protect your cashflow?
Are both your income and savings are beating the inflation?
Have you been saving up for retirement?
What is your contingency plan when you lose the ability to work?
Do you have any insurance protection when it comes to sickness, accident or even premature deaths?
And why is it important to have a safety net setup?
Imagine a construction site. Can you picture one without a fence around it?
The purpose of the fence is to prevent people
from trespassing and damaging the property which could delayed the entire project.
So Risk Management is needed so your saving plan will not be at risk and not get delayed.
The last Step is to Grow Your Money.
It’s never about which stock portfolio or which land to own.
First, it’s about taxes.
It you can save 20% tax from the government,
that’s a guarantee 20% return on your investment.
What is your strategies to protect your money from taxes?
Then it’s about the Rate of Return.
Whatever the investment vehicle that you choose, is it on track with your goals?
For example: John saves $20,000 a year,
he wants to save $100,000 in 5 years for down payment.
In this case, John don’t need any investment return because he can do it just by saving.
But if John wants $125,000 in 5 years instead.
Then each year he needs to have additional 8% rate of return per year on his saving.
In this case, putting all the money in a saving account might not work.
Vice versa, stock market might give the rate of return that you need,
but there is no guarantee to the growth.
The key is to find the right balance.
Lastly, write down the things that you are good at?
Nowadays, any skills can be the key to huge financial success.
Best example is Ryan Kaji,
a 9-year-old boy who makes 22 million in revenue in a single year from social media.
And he started off his channel by reviewing toys.
Again what are you good at? Write it down!
That’s the 4 steps for planning your financial goals!
It’s about writing it down, knowing your money, protecting it and growing it!
Leave a comment below if you have greats tips for planning as well!
As always, Thank you so much for the spending the time with me.
I hope you enjoyed it! And I will see you in the next video!