PERSONAL FINANCIAL PLANNING

(DMC MOTIVATIONAL COLUMN)

When sick we run to our Doctors, when our cars are faulty we engage our Mechanics.

It is however somehow and funny that many people do not deem it fit and appropriate to have Financial Advisors to give them valuable advise on Financial Matters.

This is the reason why a lot of people retired and get broke almost immediately.

My advice even as we continue this Lecture is that: You should try to get a “Financial Advisor” as soon as possible

Next, I will be asking some Personal questions which i will want you to try as much as possible to provide answers to it in your quiet time:

1. How much did you earn in 2019?
2. How much of it did you invest in Profitable Assets during the course of the Year in No 1 above?
3. How much of the Funds you earned in No 1 above did you save?
4. What now is your Investment Plan for 2020?

Do you even have any yet?

1. How many of us have Financial Advisors?
2. How many of us have Yearly Financial Goals?

Your Financial Goal can be paying of a debt, increasing your Savings to a particular Value in future, Investment in Property etc.

1. How many of us have Personal Balance Sheet?

A Balance Sheet is a statement of Networth depicting your Assets and Liabilities.

If your liabilities are more than your assets, then there is a problem!

Can we step down a bit and Ponder over these questions in No’s 1 to 7 as asked above?

Let us us note that the New Finance Act has increased the Value Added Tax (VAT) from 5% to 7.5% – This will surely result in increase in inflation and reduce disposable income. Almost all Service Provider will push the inherent cost to you as the Consumer.

How many of us has ever bothered to notice that ALL the Network Providers tactically push an Extra Cost of VAT on all the Calls you made on all your Calls?

The next question is: How many of us are strategizing to reduce the effects of all these extra cost on our Finances?

The following also are certain salient facts I also want to emphasize even as we Proceed further on this:

1. You will retire or be retired from your job one day
2. You will grow old and feeble if you live long enough
3. Your family, relatives and friends will need your Financial Supports.
4. You must live under a roof – House!
5. You must feed and cloth yourself when active at work and in retirement when you no longer works.

Now, the big question now is how ready are we for all of these?

I will want to leave out some minutes for you to ponder over these things for another two (2) minutes and then we will continue.

Now the following are my recommended Financial Planning Tips which you can readily apply for Year 2020.

1. Get immediately a Financial Advisor if you don’t have any yet.

Please note that it is very important to have someone that guides you through your Investment Activities.

1. A Popular Proverb says: Money saved is money earned.

Pay yourself!

You pay yourself by Saving – You can start will like twenty percent (20%) to thirty percent (30%) of what you earn.

Adopt the 70:30 Rule – Seventy percent (70%) to fund your Needs and living expenses and thirty percent (30%) to build your wealth.

Your Investment should be in Long Term, Short Term and Retirement.

1. You should ONLY lend out money you know that you can let go.

Learn to say “NO” when it is not convenient for you.

1. Get a Life Assurance Policy even if you think you don’t need it.

It helps and disciplines you to save and most importantly helps your family should in case the unthinkable happens

You can contact an Insurance Guru to shed more light on this.

1. For those of us in Paid Employment, increase your Pension Contributions by using and exploring the “Additional Voluntary Contribution Option”.

This a Good Way to save.

All you need to do is just to talk to your Human Resources Unit in your Office and they will assist you to emplace this.

1. Get Financially Informed.

Most banks offer high yielding Savings Accounts. Make proper enquiries about it and explore them properly.

For instance, Fidelity Bank offers a Product called HYSA.

Other Banks have it in different variants.

The Interest Rates of such Accounts are normally higher than the normal Savings Accounts but with certain conditions which must be met like a Programmed Withdrawal Pattern.

1. As much as possible, avoid loans unless it is to be used for an Investment that will repay both Capital and Accrued Interest easily.
2. For those in Paid Employment, ensure that you have a “Side Hustle” that will serve as an Additional Source of Income to you.

Explore the Gaps in your Environment and create Value. People will patronize you if you offer what they want.

It can be car wash business, football viewing center, Laundry, Barbing Salon.

You don’t need massive Capital to start all of these businesses.

1. Find a way to track your Expenses.

It is quite important you know what takes the large chunk of your Income.

1. When you Invest and generate Interest, try as much as possible to reinvest both Interest and Capital.

This normally strengthens your Financial Base.

1. If you find it difficult to save, set up a Standing Order/ Direct Transfers Instructions on your Accounts to a restricted/dedicated Savings Accounts.

Your Bankers will handle this for you gladly.

CONCLUSION

Let me try to round on this with this Statement.

We must as a matter Top urgency also ensure that:

1. A Contingency Plan should be made in order to secure our Emergency Cash Outflow.

Amount kept aside for contingency should be at least one Year Annual Income and must be kept in liquid form – Say in a Fixed Deposit Account.

1. We must teach our children Financial Discipline.

Even when we can afford it, let them understand what it means to witness lack.

Let them also appreciate working to Earn.

All these will surely help them in the nearest future.

1. Give a Portion of your Earnings to God (Tithes and Offering) as well as for Charity Purposes.

The Scriptures says there is Blessings always in Giving.

On a Final Note however, it is never too late to start Investing.

Just ensure that you start now and of course be very aggressive about it

Even the Bible says: Since the days of John The Baptist, the Kingdom of God suffereth Violence and the Violent takes it by FORCE!

COURTESY CONTRIBUTION APPRECIATIONS TO: BABATUNDE ADEFUSI-OWATE (FCA)

MOSES DURODOLA (CONVENER, DISCOVERY MEDIA CREW)