What Is Financial Planning And Why You Should Have One

The subject of financial planning is closely related to investing. Investing without planning is like throwing a handful of rice on the wall and hope that a lot will stick. If you compare it to the financial investing, that means you gonna lose more than you make.

Investing success always entails proper financial planning. Success in stock investing can be be depended alone on market timing, picking the best stocks, tips from the stock brokers or simply hope that you gonna make more even without doing anything. Although it helps, but you need to have some kind of investment discipline and learn how to stay on course.

An investment and financial plans can be considered as road map. You must have a clear idea on how to get from Point A to Point B. Consider all your current financial status and what you want and how much you want 10 years from now. Consider your house' mortgage, education for the children or perhaps a vacation every year to your dreamed destination.

All these covers in your plans both financially and investments, so that, everything will be in proper order and you don't have to use certain money allocated to a particular thing unintentionally, and it maybe too late to realize it.

Write out your plan, specify the things you want to invest in and how you gonna carry it out to achieve that goal. It is not enough to have a plan and never writing it on paper, simply hoping or wanting huge returns.

Say for instance, it is not good enough to say or write "I want a happy retirement", it's much better to write things down on how much you can put aside monthly from now on and what you gonna do to that money in order to grow it, then when you retire you can have a good and more than enough passive income.

And, if you can't figure out your specific plans financially, you can consult a reputable financial planner. These people can come with a decent plan based on what you want and make it realistic. Let's face it, it is sometimes hard to come up with a plan specially on a financial point of view if you don't have any experience on it. Planners will ask you a series of questions and ask you squarely about certain things that can help them formulate a solid financial plan for your future.

The Golden Rules Of Financial Planning and Investing

• Write down specific goals and make them realistic as well as achievable
• Don't invest on anything without a purpose
• Proper assent allocation
• Diversify your investment, invest in stocks, bonds and even mutual funds
• Don't get so emotional, always stick to your investing plan
• Proper mindset

The last one I mentioned doesn't mean it's the least, it is actually important to have the proper mindset in investing. This is where you can achieve goals easily and effortlessly. Having the proper mindset, you can always stay on course on your investment plans and never have to panic even when bear market arrives.