VERY GOOD ARTICLE.
In the new year resolve to clean up your financial skeletons in your closet
BY JOYCE CHUAH - SUCCESS CONCEPTS LIFE PLANNERS CEO
We need to clean up ourfinancial closet by reviewing various areas
YES, it is the time of the year to open your financial closet and get rid of the skeletons out
of our financial lives.
Doyou have a secret you’re hiding regarding your money matters? Are you portraying a life offinancial self-control but in actual fact your financial life is in distress?
There are seven “shelves” in our financial closet that need reviewing:
* Your cash flow: How many months can your saving support your expenses? A minimum of
four to six months is essential.
* Your net worth: How much do you own and how much do you owe?
A good gauge is not to owe more than 40% of what you own. It also
depends on your other personal milestones, e.g.your retirement date and other obligations.
* Your investment portfolio:
What is the proportion of exposure to equity versus fixed income?
Asset allocation differs from one person’s financial situation to another, but a general rule of thumb is this: take your current age as the average percentage of fixed income instruments you should own.
* Your insurance plans:
What types of coverage have you bought- are they all participating plans?
Do a thorough check if you are indeed sacrificing coverage for expensive
guaranteed plans.
* Your debt structure:
What debts have you been accumulating?
Ensure that your debts help you put more money into your pockets than the cost of the debt.
Review if you own debts which can be paid off, especially if you have dormant cash lying in low interestrate vehicles.
* Your retirement plans:
What have you been consciously doing to retire well?
If you have been planning for your retirement on an adhoc basis,you can be sure it won’t turn out the way you want your retirement to be.
Retirement planning needs serious and consistent action.
* Your estate plans:
Have you been putting off writing or rewriting your will, wasiat or hibah?
Once that is done,it is important that your better half is told where they are kept.
There is no pointspending time and money on estate plans and no one knows about it.
Open up your financial closet now so that you can be a financially confident person in 2014.
And that’s a good New Year goal to have.
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