Planning for the future: The Three Personal Finance Pillars
“People’s quest to secure a comfortable retirement can often end up making them poor and others rich.”
Personal financial planning can be viewed as a journey throughout your life. When you first enter the job market and start to earn, you must take steps to protect your interests. Over time, you may consider growing your wealth beyond a regular job-based income. Finally, as you start to accumulate wealth, invest and deal with expenses, you will want to consider planning for the future and for your retirement. This journey is neither linear nor does it look the same for everyone. This is because every individual has their own financial goals, and you will need to craft your plan in a way that works for you.
While personal financial planning is a complex and ever-changing task, it can be broken down into three key pillars:
The first pillar is protecting your interests: In this phase, you must learn to safely manage and maintain your hard-earned money, apply basic accounting techniques to personal finances, reduce expenses painlessly and invest in insurance.
Next is growing your wealth: In this phase, you must learn to select investment options that work best for you, choose the best investment advisor for your needs and determine which investments result in positive long-term results.
Finally, it is time to plan for your future: In this phase, you must learn to crack the retirement code by debunking common retirement myths, understand the importance of RRSPs and optimize your retirement resources.
Whilst you can address each pillar based on where you are in your career, you will have the best chance of long-term success by simultaneously working on a comprehensive plan that covers all phases of your long-term journey.
The old way to get wealthy was to acquire assets like real estate, stocks and mutual funds, often using debt, and then sit back and let time grow your net worth. But that strategy is deeply flawed and may have counterproductive results. That’s because it ignores the one basic principle that overrides any wealth-building strategy that anyone who is truly rich knows: What we should really be focused on is not getting rich, but plain old cash flow.
David Trahair, CPA, CA, financial writer, trainer and best-selling author offers his independent views throughout the four courses listed below. The objective of these courses is to give you the information, the tools and the confidence to take charge of your personal finance and investing strategy, so you can start getting ahead no matter what the current environment throws at you.
- How to retire in 10 years or less
- A Six Point Plan for financial freedom
- Retirement Planning Bundle
- Financial Myths That Will Ruin Your Retirement Dreams
You balance budgets, set financial goals and build strategies where you work but we encourage you to work just as hard on your own financial future. So, let’s get started, shall we?
