by Timothy Cummuta

Created on: June 07, 2010   Last Updated: June 08, 2010

Myth: Financial Planning is only for the wealthy  

Financial success is a relative concept. I can guarantee your version of financial success does not look like my version. We are each unique and have grown up in totally different environments. We have different desires and goals in life. One person may want to leave maximum wealth to their families as a legacy. Others may want to die with nothing having given it all away. Whoever you are the only real way to become financial successful at any level is to plan. Everyone can become financial free, independent of reliance on the government or anyone else to care for them throughout their lives.

There comes a time when one has to stop listening to people who really do not know what they are talking about in this area and start looking at the reality that financial planning is a necessity for everyone in America today.

Let’s consider the steps of financial planning. Here are the six steps to creating a workable financial plan:

1. Determine your current financial situation

2. Determine your goals

3. Identify alternative courses of action

4. Evaluate alternatives

5. Create and implement the financial plan.

6. Reevaluate and revise the financial plan

Is there anything here that states you must be wealthy? The truth is that anyone can achieve wealth with proper planning, determination, and action. Let’s say you are 25 if you save $158 a month at 10% you’ll become a millionaire by age 65. Now we all know there are obstacles to such a plan. That’s why you create a plan in the first place to foresee obstacles to your goals and create a means to overcome or sidestep them. In this brief we will attempt to educate our readers on what is essential to a successful financial life regardless of your age. Keep in mind one final and paramount issue as you read, nothing happens without action! 

Determining your current financial situation  

This is a picture of your complete financial position. It includes:

Personal property Income Cash savings Living expenses Debts Investments

You will also need to know two essential items. First item is your net worth. This is what you own minus liabilities, all liabilities. If you own a $140,000 home and owe $130,000 on it your real net worth is only $10,000. This is your real wealth! The second important item is your cash flow. This is all the money you have coming minus all of the money going out, all of the money

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