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| Stages of Financial Planning |  All people want to retire with some level of financial security. All of us want the peace of mind and self-dignity especially in retirement. Such feelings come from knowing that we are not likely to become a burden on our families, the government or the state.
Stages of Financial Planning:
- The Accumulation Stage
- The Distribution Stage
- The Preservation Stage
The first stage is the period of accumulating assets that will further to your wealth. This stage includes your working years. Firstly you learn to earn money, and then you determine how best to manage your money to make it grows into wealth. You can efficaciously perform this by investing in different asset classes that will create the basis of your wealth.
This stage supplies with a certain level of financial stability. Most people never leave this stage their entire lifetime. Nevertheless, majority of the population do not even step on this stage for beginning to save up any assets. They continually live from paycheque to paycheque without thinking about their financial future.
If you have invested in your first property (not your residential apartment or house), if you have bought your first business, or some stocks and shares, then congratulate yourself.
Common Asset Classes:
- Cash
- Bonds
- Land and real estate
- Stocks and shares
- Precious metals
The best advice is to hold onto the assets you are acquiring, and let time to work. You have to set time-bound goals for how long you plan to save up your assets before moving on to the next stage. Work industriously on your plan and keep your focus.
You have to know that investing in several asset classes is an investment strategy that can essentially increase your chances to reach your investment goals faster.
The second stage is the period when you get to enjoy the benefits of wealth, when you get to draw down income from your assets.
The last stage is the preservation stage. During which you plan to preserve and protect your accumulated wealth and prepare to safely transfer it to your rightful heirs.
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