6️⃣ Components of Financial Planning

  1. Cash Flow Management
    ▪️Identify your income and expenses to get the full picture of your financial status which includes assets, liabilities, and net worth.
    ▪️A proper cash flow management includes setting short-term, medium-term, and long-term goals.
    ▪️Budgeting is to organize how you spend your money and prepare emergency funds to cover financial emergencies.
  2. Investment Planning
    ▪️Developing the ideal investment to meet your goals are about strategies that takes your risk tolerance and the timeline of your goals into consideration.
    ▪️Diversification reduces your investment risk by allocating your funds to different types of financial instruments, industries, and categories.
  3. Risk Management
    ▪️Risk Management is all about protection for you, your loved ones and your assets.
    ▪️It will take replacement of income into consideration that provides financial protection when uncertainty happens that prevents you from working.
    ▪️Medical bill is a huge expense that majority could not afford. Hence, it is important to have medical coverage.
  4. Estate Planning
    ▪️We hope to leave something to our children. To ensure our estate would be given to the beloved one, a Will may solve the concern.
  5. Retirement Planning
    ▪️Retirement planning helps you to set your financial objectives and lifestyles during retirement.
    ▪️It is important to calculate your cash flow in order to define if there is surplus or shortfall to reach your retirement objectives.
  6. Tax Planning
    ▪️The objectives are to ensure you are aware of the tax compliance and utilize the eligible tax reliefs.

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