 The financial planning profession was not known thirty-five years ago, but today, hundreds of thousands of people claim themselves to be financial planners (and some of them really are!). But, actually, what financial planning is, and is it really necessary?
Often our parents didn’t plan for their future. And why should you do it? It seems that the main reason your parents didn’t plan is the same reason you haven’t packed for Europe: You’re not going anywhere! Even our grandparents never planned for their future because they think there was no need for planning.
Anyhow, things are different today. And among it, there is the need for financial planning. We can speak about 1 reasons, that can help us to answer the question - Why we need to plan?
The 1st one will be the next:"Protecting Yourself and Your Family against Financial Risks"
Any financial planner can’t protect anyone from risks in his life. But he will be able to protect you from suffering the financial loss that may result when any of those risks become reality. What are those risks? The main of them are injury, illness, lawsuits, death.
Lawsuits? For example, the variance that your house will burn down are 1 in 1,200 — yet according to Forbes magazine, the variance are just 1 in 200 that you will be personally sued at some point in your lifetime.
The second reason: "Eradicating Personal Backlog"
Some people think, that their proper aim is to become contemptible. So, if you owe lots of money to credit cards, auto loans, and student loans, becoming contemptible would be a real improvement. Then you really have to move from owing money to owning them.
You have to make sure that you don’t outlive your income, and in this way you’ve got to amass your assets so you can support yourself for a lifetime. You must eradicate your debts, if you have them.
The third reason: "You will live a long life"
Earlier people expected to live only to age 47. That’s why, almost everyone worked and there was no such thing as retirement.
Today, life waiting tables from such different groups as the IRS, life insurers, the National Institutes of Health and the Centers for Disease Control and Prevention all say mainly the same thing: A child, which was born in 2007 has a life waiting of 78 years (up from 47 in 1900); a 78-year-old today will live to 88; an 88-year-old to 94; and people who reach 100 are expected to live to 103. And these are the main reasons why we need to plan.
How Old Will You Be in 2100?
All those life waiting tables undertake that life waiting will remain at running levels, and it is the most absurd part of it. But that is not likely to be the case. Researches show that people’s lives will be longer and longer.
Why are these outlines so important? At first you have to enterprise how long your retirement might be and then you will decide how much money you need in retirement.
Financial planners suppose their clients will live to age 90, but the most preservative ones use age 95. It is very interesting but researches show that people can live to age 140.
Imagine ourselves in 2050…Can you? Let’s confront it: For many of us, 2050 is a done bargain.
If that’s not striking enough for you, try next: all we can see the year 2100. The complicity for society scares the mind. But maybe let’s look closer at what such long life spans could mean.
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