At a training run many years ago, a participant asked me for the titles of the books that I had already written. And with veiled pride, I enumerated the following titles: “Pwede Na! The Complete Pinoy Guide to Personal Finance” and “Pwede Na! The Complete Guide to Retirement and Estate Planning.”
To better describe my books, I mentioned that the guide to personal finance was appropriate for beginners and that the guide to retirement and estate planning was suited for people in the last third of their life. In other words, the first book was the alpha (A) while the second one was the omega (Ω).
Literally, the alpha and the omega are the first and last letters of the Greek alphabet, respectively. In Christianity, the alpha and the omega pertain to Christ as the beginning and the end, respectively.
But I was momentarily caught flat-footed when I was asked the question, “So is there nothing in between?” I had not really thought about what was between the alpha and the omega.
Then, after regaining my composure, I realized that only one thing can be between the alpha and the omega and that is planning.
There are commonly just five steps to any planning activity, including financial planning. These are: 1) setting goals; 2) determining if you are all S.E.T.; 3) evaluating execution options; 4) implementing the plan with diversification; and 5) reviewing accomplishments periodically.
Setting goals is basic since a person will not know if he has created enough wealth if he does not have a goal. The idea is to focus on the goal. Focusing on money will almost always just lead to greed. Keeping eyes on the true and eventual prize is the key.
Determining what resources one has to achieve his goals is also important. Even Luke 14, 28-32 of the world’s bestselling book ever says this about analyzing resources:
“Which of you wishing to construct a tower does not first sit down and calculate the cost to see if there is enough for its completion? Otherwise, after laying the foundation and finding himself unable to finish the work the onlookers should laugh at him. and say, ‘This one began to build but did not have the resources to finish.’ Or what king marching into battle would not first sit down and decide whether with ten thousand troops he can successfully oppose another king advancing upon him with twenty thousand troops? But if not, while he is still far away, he will send a delegation to ask for peace terms.”
In terms or resources, “S” stands for size of funds, “E” is for expertise in investing, and “T” is time available for managing investments 24/7.
The alpha and the omega are the pieces of bread to a personal finance sandwich; and planning is the filling.
(Originally written by
Evaluating investment options and not simply choosing the first one that comes by is the way to go. In fact, investment options must be matched with the goals set and the available resources.
Inesting always bears risks. That is why spreading risks through diversification is not only an ideal step but also a mandatory one.
Lastly, there is no full proof financial plan. As such, performance must be measured at least once a year to see whether accomplishments are still on track with the goals set.
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