Monday, 28 January 2013

Target net worth and plan summary

If you’ve followed along this far through my collection of financial planning posts, congratulations.  You’ve got most of the pieces you need to develop a reasonable financial plan:
  • Your vision and goals – which will determine how much cash you need in the future (and which will make the whole journey worthwhile!)
  • Your available cash flow – the funds you have available to invest after your day-to-day expenditure is deducted from your income
  • Your target asset allocation – how you will invest your savings to ensure you can fund your goals
  • Your desired investment products – the specific financial products you will invest in to achieve your target asset allocation
  • Expense and net worth tracking tools – to monitor your progress against your targets
  • Your financial risk profile – to ensure that you can sleep at night while carrying out the above activities
I’ve taken the opportunity to revisit my own financial plan, and I’m really excited about achieving my new goals.  I’ve built a tracking mechanism into my budget and expense tracking spreadsheet to show my month-by-month progress on the way to being a millionaire by 2020.

It looks like this:



I did a quick calculation as to where I’m at for January and was quite pleasantly surprised!  I’ll show the results in my 31 January post.  In the meantime, I want to cover two important topics on protecting your wealth: insurance and estate planning.