Benefits of Financial Planning

At the heart of the financial planning process is the aim to achieve one's financial goals, needs & priorities. The contingencies we may encounter or need to overcome as we move through life can be summarised by the acronym LIBERTY.

L - Liquidity
Avoid the liquidity trap; lack of liquidity or the inability to convert assests into cash quickly and without losses often leads to financial losses. The extent of the loss is often directly related to the urgency of the sale. Hense a "fire" sale may burn up profits or even capital.

I - Inflation Protection
Like the magic of compound interest, inflation can also cause a dent in our plan and eat into our limited resources, if left unnoticed.

B - Bad Patch
Be prepared for rainy days by establishing a cash reserve that can last for three to six months, to be tapped in the event of unplanned unemployment, short-term illness or disability

E- Estate
Preserve the value of your assets and business interest. Also, make sure your wishes with regard to the transfer of your assets are carried out when you pass on. One should also avoid unnecessary delays and cost in estate settlement as this may cause undue distress to family and/or friends

R- Resources
While spending for today is important, saving for tommorrow is also essential, especially to cater to long term situations such as retirement, critical illness, permanent disability, or survivor needs. One should build up capital in order to be able to take advantage of the opportunities that could knock on one's door, such as setting up a business

T- Taxes
Inadequate tax planning, especially for high income or high net worth clients, often reduces the clients' savings for capital accumulation

Y - Yield
Everybody make money but fewer save it wisely. Even fewer know how to invest what they have saved and make the money work for them. At some level of personal security, your investments must generate enough growth to keep your after-tax assets at least on par with inflation. The financial planning process heightens the clients awareness to manage money wisely, making it work harder through sound financial strategies to achieve his goals.