Financial Planning

What is financial planning? Good question. Do you want the laymen’s definition or the financial planning handbook’s version? How about I give you both, so the technical finance guys who stumble across this blog can’t burn me at the stake for not being accurate and people new to the term “financial planning” can actually understand it. Let’s start with the definition from the South African Financial Planning Handbook. It reads as follows “Personal financial planning is the organization of an individual’s financial and personal data for the purposes of developing a strategic plan to constructively manage income, assets and liabilities to meet near and long-term objectives.” Wow! While 100% correct, it’s a bit of a mouthful. In simple laymen’s terms financial planning means having a personal plan in place to make money and a contingency plan (safety net) in place to reduce the risk of losing your hard earned bucks when life throws you an unexpected curve-ball. I will discuss a few of those unexpected curve balls in the next financial planning post. What you need to know is that making money and planning properly to protect it (in a nut-shell) is the name of the financial planning game. However ...