Be Clear on Your Destination Before Planning the Pathway

Where do you Seek Financial Advice?

Most people seek financial advice (from either a financial adviser, accountant or friend) to either become more financially secure, have more time with their family (by having a passive income and not being solely reliant on salary income), enjoy “nicer” things” or help out family. However, all these are comparative terms rather than absolute terms – eg one person’s idea of nicer maybe be totally different to another person and might be different again to another person.

How to Create Your Plan

It is very difficult to accurately plan for these generic goals (ie security, more time or nicer things) and more importantly you will not be motivated, because there is no personal emotional attachment (to these generic goals).

Therefore, the first and the most important step in planning for a “better” future, is getting absolute clarity (both as an individual and as a couple – if you are in a couple) on what “better” means to you and why these are important to you. If this seems like a daunting process for you and you do not know where to start, the following provides you with the framework to work from:

Step 1

List what your fundamental requirements are? Ie list all the items what you would not give up any circumstances even if it means enabling to fund your future aspirations. These fundamental requirements are broken into 2 categories.

Basic Requirement/Necessities

These include food, shelter, clothing, power, transport etc.

Current Discretionary Spending Which You Will Not Forgo Under Any Circumstances

These include school fees, sport activities, children sporting activities, car, phone, entertainment etc.

Step 2

Take a leap of faith and assume that once you go through this exercise that you will be able to fund the items you have listed in Step 1 as well as have surplus income and list all of your unmet aspirations in thorough detail.

When I mean thorough detail I do not mean go on more holidays, I mean holiday where, with whom, why holiday there, for how long, how you will feel when you are there, where you are stay etc. It needs to be in detail.

Or work less so I can be more involved in a charity that is really important to me. List why that charity, how much time will be involved, who it will be helping and how you feel when are involved.

Step 3

Once you have listed all of your aspirations, highlight those, which have personal significance/meaning for you.

Step 4

Once you have a list of aspirations which have personal significance to you then prioriitse these down to the top 5 (either as an individual or as a couple). Find pictures that represent these aspirations to you and make a vision board.

Now you have crystal clarity on where you want to be you can start working on getting there.