Create your financial plan
If you want to achieve a concrete result, it is necessary to have a plan, so I suggest you to create your financial plan.
For this, it will be essential to have a goal, which can be in the short, medium or long term and it will be better if it is in all three periods. In the long term you must have your maximum desire or objective and in the short and medium term, the intermediate steps. Some people even propose 7 steps to achieve success. By dividing the target into different steps, the path will become easier and shorter.
On the other hand, I propose the following considerations, described on the Rankia website (https://www.rankia.com/blog/etfs-pm/4680116-7-consideraciones-para-crear-plan-financiero) of which I detail the ones that I consider the most important:
Always take control
1. A good Financial Plan should not depend on things that are beyond your control, for example:
a. What the Market is doing or did recently or will do in the future.
b. What others are doing to become millionaires.
c. What the Great Investors are doing or what economists and other gurus are saying in the media.
In short, take control of your life and your situation. If you have played the Cashflow game (here is the link of the online game), you will know that each one starts from a specific situation but it doesn’t matter what’s your initial economic situation (income, expenses, mortgage …), all the roles can come out of the rat race and be financially free.
2. A good Financial Plan focuses on the things that are within your control:
a. Your saving capacity
b. Your goals and needs. Where are you now and where do you want to go?
c. What’s important for you
d. Your time horizon
e. Available time and ability to invest your savings
F. Understand that it can evolve and change over time because it is not static or immovable
Define your problem well
3. Don’t ask for solutions if you haven’t identified and defined the problem yet.
We have the advantage that we are planning for our future, therefore, we have more time. This way we avoid easy, quick and available answers, but they could not be the best or they could be incorrect.
4. There must be a balance between the pleasures and savings of the present and the happiness and expense of the future. If not, you will fall into frustration and the road will be long and with negative connotations.
5. Stop dreaming about jackpots and lotteries. Instead, start saving as soon as possible.
6. Do not make financial decisions based on fear, euphoria, political ideologies or moral positions.
a. Emotions make us fall into countless behavioural biases that lead us to do silly things.
b. This is not a soccer game or a political debate. Our hobbies and morality must remain for other topics. There are many statistics that show us market returns are amoral and apolitical.
c. Do not confuse amoral with insensitive. Neither apolitical with apathetic.
What about you, do you have a financial plan? Leave your comment or question and subscribe.