Personal Financial Planning Like A Business
As the CEO of You Pte Ltd, you are in charge of your life. Financial planning is an important part of your life and it should not be taken lightly. It can make or break your future.
I did a quick google search the other day on financial planning. This is what I got: “Financial planning is the task of determining how business will afford to achieve its goals and objectives.”
I gave it some thoughts and found this really interesting! Putting it into perspective, we should see personal financial planning as our own little business! How can we plan our finances to achieve our goals in life, turning dreams into reality?
In fact, there’s more to it than just investing in stocks, buying endowment plans or purchasing insurance. Let’s break it down like a business.
MIND YOUR OWN BUSINESS
Revenue — How many streams of income do you have? Usually, our main source of income comes from salary.
Cost of business — Loosely, it is our cost of living. What kind of food you eat, the transport you take, the type of clothes you wear… The list goes on. I was able to reduce my cost by adopting some FIRE strategy.
Contingency — Your insurance to protect your business. Should something happen to you, what plans have you made to make sure your business carry on with minimal interference?
Business Continuity Plan — How do you intend to build an empire that gives you an endless stream of income? You can do it by setting aside money in different kinds of instruments. Growing your wealth is key.
In order for a business to see gains in profit year after year, there are 2 main ways:
- Increase business revenue — increase our income; a pay raise, change of job or upgrading our skills to command a higher pay. Bonus: Starting a side hustle can bring you extra income too!
- Reducing cost — by reducing your expenses, you will see an increase in net gains even without an increase in revenue.
CUT COST, NO BUDGET LA
Increasing your revenue is not easy. Cost cutting will cause your employee (you) to be very unhappy. Imagine working in a company without a pantry. Imagine working in a job without social events like the annual DnD; There won’t be any welfare at all and life would be miserable!
Finding a good balance between cost and revenue is crucial. If you can strike the right balance, you will be a very happy employee of your own life!
In conclusion, personal financial planning is like operating a business; we look at our financial standings and challenge ourselves to improve. By making sure all departments do their job right, you will eventually see growth in your life. You are the CEO of You Pte Ltd. Take charge of your organisation!
Starting to see your live like a huge MNC? Need help to design a blueprint to get started? Look no further.
