Do you want to build your own wealth?
Do you want to invest and grow your money?
We all want to realize our dreams – whether it is to travel the world, retire rich, buy our dream home or send our kids to college. And we know, one of the best ways to help us achieve our goals is to invest or earn passive income.
Before jumping into investing, you might want to consider proper planning where you should place your money, or you may end up risking to lose what you have accumulated.
What am I talking about? According to financial experts, a strong financial plan/foundation should be built like this:
Like building a house, wehave to have a strong foundation first. We must also build it from the ground up.
1. Health Care – The first thing we need to have in our financial plan is proper health care. A serious and unforeseen illness not only affects us physically but financially as well. When this happens, we may end up using all our savings and investments for our recovery and survival. We are blocked from achieving our goals and dreams in life, unless we get prepared.
2. Protection – A life insurance provides guaranteed income loss protection against premature death. If death happens to us, our beneficiaries will have instant money to pay any liabilities we left behind and to continue living the lifestyle we want them to have.
3. Eliminate Debts – When we have bad debts, they may be costing us interests more than what our money is earning in investments. Debt can control our life and limit our freedom. We can never have a strong financial plan until we are debt-free. Experts advise to eliminate the high-earning interests first for a huge impact in our financial plan.
4. Emergency Fund – 3-6 months of our income is recommended to be saved or placed in highly-liquid investments. The purpose of the fund is to deal with sudden changes in our job or business and to pay for any unforeseen accidents. The fund is withdraw-able any time unlike investments.
5. Investments – After the four mentioned building blocks, we can consider to save and make long-term investments. Passive investments in mutual funds, stocks or real estate allows our money to work for us.
We should consider our health care and protection as priorities. Why? Because even if we save or invest few thousand pesos each month, it may not be enough if unfortunate events happen to us. When we get sick, disabled or if we die suddenly, our savings won’t last very long. Getting health care and life insurance can provide us safety net and instant guaranteed financial support. They are the best investments.
Likewise, emergency funds are important to deal with unexpected expenses. If our money is tied up in investments, how can we financially cope up with sudden events that needed financial support? The worst may happen if we don’t have an emergency fund -we may have to result to debt or loan.
Let us plan our financial plan right and build our wealth strong. When we build our plan this way, we can have stable and resilient finances that can withstand any money-related financial disaster.
Do you need help in building your financial plan? Send us a message for free financial consultation.