Financial planning is a generic term that encompasses a long-term process of evaluating one’s sources of income, factoring in recurring expenses and payment of liabilities and thereby arriving at a sustainable financial strategy that not only offers a sound return on investments but also protects you against any potential risks.

Financial planning is vital in ensuring one a secure life even when one is not able to earn from a full-time job due to old age.

Here is a quick look at the components involved in financial planning:
When we speak of financial planning, what is commonly assumed involves investments to increase one’s savings.

• Determine how much you wish to invest taking into account your earning potential over the years, inflation rates, timeline across which you wish to invest and what level of risk is acceptable.
• Wealth management also involves protecting your assets by means of taking out insurance coverage. Wealth protection plans ensure that your assets are well protected even if for some reason your earnings should drop.
• A good financial planning strategy must also provide for retirement. Steady savings even in small amounts over your earning years in addition to any gratuity you receive at superannuation should set you up well for a secure old age.

Sound financial plans that consider all the above factors will go a long way towards giving you a peaceful and enjoyable retirement that isn’t thrown into chaos due to any personal upheavals or market shifts.