Invest for your Future

YOU may have heard so many times that time is the greatest asset in investing. Investing for your future needs proper planning. Failing to plan is planning to fail. At first, you need to identify your future needs. Here are some tips that may help you in proper planning.

1. Prepare for your retirement fund. As young as you start working, you need to start preparing for your retirement fund, unless you are planning to work during your entire life. The ideal age for retirement is 60 years old. Building retirement funds means that you will not be passing your old age burdens to your children. Retirement fund is meant to sustain your daily needs while you are living after you stop working.

2. Emergency fund. Build your emergency fund that will cover six months of your expenses, this needs to be liquid and available anytime needed. This is also known as urgency fund and should be used only for emergencies.

3. Wedding/birthday/celebration Fund. In every goal, fund is needed to make it happen. Preparing fund for planned occasion is wiser rather than borrowing money to spend for celebrations. Specific goals will enable us to pray for specific provision. Though this fund is needed occasionally, it is important to have it funded properly. 4. Education fund for your children. You need to have proper planning and saving while your children are still young, even before they start going to school. This helps you have a longer preparation time and have the funds ready before your children would need it.

5. Travel fund. One goal that is common is to travel around the world. This really needs ample amount of money that requires a lot of preparation, planning and funding. Some people do not have enough travel plans, impulsive in buying discounted plane tickets and travel packages, fall into the trap of getting into huge credit card debts and having trouble in paying back or earning back. It is highly advisable to enjoy vacations and travels but it is important to plan ahead properly to avoid problems that may arise due to impulsive spending.

6. Life insurance. Life insurance serves as a protection against the effects of untimely death. There is no such thing as best insurance; it always depends on a person’s risk profile. Life insurance is helping an insured person protect his assets in case anything happens to him in an untimely manner. It gives the family financial peace and the assurance on the availability of funds after an insured person passes on.

7. Business fund. Having a business fund will help you start your business without affecting the funds for your other goals. It is advisable to segregate funds according to your goals. Setting up business funds will provide start up fund, borrowing may be an option at a later stage but not as the first option to setup a capital.

8. House and lot/car fund. Having your own dream house and car is a milestone for a person. Securing a housing loan entails longterm debt and financial obligation. Having a car provides transportation comfort and time flexibility. However, in both housing and car loans, higher interests are incurred, that when added up to the principal amount, the total loan to be paid is almost double or triple the original amount. Setting aside an amount that will cover the cash value of the property or car relieves a person from monthly obligations. However, if the fund saved is not enough to cover the total original value, it can be used as a down payment to lower the monthly amortization.

9. Giving fund. This is the fund set aside for giving to church or other people to whom God will lead you to give. I personally believe that it is more blessed to give than to receive. For me, giving is a form of investment.

10. Estate planning. Estate planning is important but usually neglected. Estate planning would help you compute, prepare and allocate budget that you need to pay estate tax. Preparation will relieve your beneficiaries and heirs from the problem of getting the funds to pay estate tax after you pass on.

Having the knowledge on proper planning will give you financial peace. You will avoid the troubles of looking for provision when the need arises. It is best to plan now starting funding while you are young and able to work.