CARTOON TIME

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Part 2: WHAT NEXT? (continuation from immediately preceding blog)

Now come the time to select the best investment products that best suits your financial objectives. When i say best investment products that best suits your objectives, i am referring to four (4) variables which you need to deal with. First variable will be the FINANCIAL GOALS, followed by INVESTMENT HORIZON, RISK PROFILING and then only comes the INVESTMENT PRODUCTS that you want to purchase. The third, which most of us ignore is our very own behaviour towards the exposure of risk element inherent in the investment products. Please see the diagram below for the illustration.

Let us go the first variable- The setting of Financial Goals. Most people i have come accross were very spontaneous in admitting their financial goals but they lack concrete clarity by stating these goals. Here are the most common goals put forward to me; MAKE EXTRA MONEY!! While the fundamental reason may hold some water but hearing from the horse's mouth, this irrational objective is far from clarity! Personally, i advocate quality and quantum in identifying financial objectives. Quality in this context is defined as pure and real reasons by which if not tackled financially now, you face some hardship in future. On the other hand, Quantum is defined as the amount of real money needed to be generated during the period of now untill reaching the stated financial goals. Below are some examples of a conscise financial objective that encompass Quality and Quantum.

1. TO HAVE RM 300,000 IN 10 YEARS TIME BEFORE I RETIRE.

2. TO HAVE RM 400.000 FOR MY DAUGHTER'S 4 YEARS TERTIARY EDUCATION EXPENSES WITHIN 9 YEARS FROM NOW.

3. TO HAVE RM 10,000 IN 3 YEARS TIME SO THAT I CAN USE IT TO PAY FOR THE DOWNPAYMENT PORTION OF MY FAVOURITE CAR

Can you think of some of your very own financial objectives?

If you are unsure of how to determine your final anticipated amount (quantum) to meet your financial objectives, by all means please seek the help of your nearest registered Certified Financial Planner (CFP) here or registered Financial Advisor.

Look out for my next write-up. Untill then,Take care!