Many always think to become an expert in investment. In fact, investment is only part of financial planning. We should learn more about financial management and master the basic principles of financial planning-knowing ourselves ,diversifying risks,  long-term financial planning etc. 


Work with financial professionals to formulate a financial plan that suits you and your family’s financial situation, implement it persistently and make timely adjustments, and the probability of achieving your financial goals must exceed 80%.


How to start financial planning?

Know yourself. The first thing to do in financial planning is to be a “confidant”.


Know yourself 1: Understand your income and expenses.

Many people do not know how their money is spent, or even how much they earn. Without this basic information, it is difficult to formulate a budget and rationally arrange the use of money, and it is not clear where to spend money and where not to spend. 


Know yourself 2: Record your financial situation.

If you can measure, you can understand, and if you can understand, you can definitely change. We must keep continuous, organized, and accurate records in order for a financial plan to be realized. A good record can help you:


   1. Measure your economic status as the basis for formulating a reasonable financial plan.


   2. Effectively change the current financial management behavior.


   3. Measure the progress made in approaching the goal.


Therefore, at the beginning of the financial plan, take a health check for your financial situation to understand your income, expenses, net assets and liabilities.


Know yourself 3: Clear values and financial goals.

Without clear goals and directions, you cannot make a correct budget; without sufficient reasons to restrain yourself, you will not be able to achieve the goals you expect in 2 years, 20 years, or even 40 years.


Know yourself 4: Determine your net worth.

Once the financial record has been made, it is easy to calculate the net worth – this is how most financial experts calculate wealth. Why must we calculate net assets? Because only by knowing the annual net assets can you know how much you have made towards your goal.


Know yourself 5 :Budgeting and implement it 

Wealth does not refer to how much you earn, but how much you have left. It sounds like budgeting is not only boring and cumbersome, but also seems to be too artificial, but through budgeting, you can find the whereabouts of large sums of money in the daily expenses. Moreover, a specific budget is very good for us to achieve our financial goals.


Know yourself 6: Cut costs.

Many people complained at the beginning that they could not spend more money to invest in order to achieve their financial goals. In fact, the goal is not achieved by relying on large investments. Cut expenses and save every dollar, because even a small amount of investment may bring considerable wealth. For example, if you save an extra RM100 every month, what is the result? If you start investing at the age of 24 and you can get 10% of the annual return, you will have RM20,000 at the age of 34. The longer the investment period, the more obvious the effect of compound interest. Over time, the profits from savings and investment become more apparent. So the earlier you start and the more you save, the more profits will multiply.


Cultivating the above habits can help you start your own financial planning. 

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