Sustainability Tools | JDC EXEC
Intent for your future and plan ahead
Janine Do Cabo | Sustainability & Leadership Development | JHB, SA
Planning is like the roadmap to our desired destination. Where are you going in your finances? Without a map, how can you possibly expect to reach your destination? When there is a plan for your finances, family and future then you have a basis to hold your life against to identify if you’ve achieved what you have set out to do or not.
Most of us know someone or is the person that received that dreaded call of retrenchment, death, recession, divorce, liquidation or staff cuts. At that moment your financial future feels like it slides down a long dirty drain and stress and anxiety most likely settles in. It does not have to. There is a bright side. All too often we find ourselves dreaming about the kind of life that appears to be for the select few without making IN10TIONAL objectives that will make our dream a reality.
Planning will entail a 10 and 20-year plan that not only documents your goal but stipulates the achievable steps you plan to take in order to achieve the goal and obtain the prize. For example, say you would like to pay off your 25-year mortgage in 12 years. The goal is there and it sounds amazing, but how will you achieve it? Is it achievable? What prevents you from making the deadline and how can you best overcome it? Are you disciplined enough to do so? Financial discipline plays a major role in achieving these goals and withstanding the urge to keep up with the Joneses.
What is your mission statement? Do you have one? If not, use a guideline that encompasses your values, what or who inspires you, and what you love about yourself, life and others as a benchmark. While identifying what you won’t tolerate. I’ll say that again, “identifying what you won’t tolerate”.
What has knowing who you are got to do with my finances? EVERYTHING!
Make a list and write where you see yourself in the next year, 5 years, 10 years and even 20 years and write out your vision. Grab, a paper, write it quickly do not think to much about it. Do you know what you want? Well, that is why you should get to know yourself 🙂 Any good business destined for success has a mission and vision so that is sets the tone of their future plans. View your life and yourself as the business you’re going to invest in. Will you invest in your business? Or does it need a little more work?
Once you have determined that the pipe dream could be yours, get to planning. Plan to prosper.
Financial planning requires a plan….It sounds pretty obvious, doesn’t it? But yet a vast majority of us don’t plan enough and wonder why we have more month than money.
There are 3 sources of income: Active, passive, and portfolio.
Active is the income derived from your job for the service you’ve rendered within the week or month, for most of us, it is what you are doing right now. It can also be from tips, commission, salary, wages, and any income from businesses where you have material participation. If you feel limited by your paycheck, upskill. There are many institutions that offer free courses that will give you edge so that you can rise above your current pay.
Passive income is an income received on a regular basis but the effort to obtain it is far less than that of the active income. It would include real estate/property, royalties from patents or license agreements, dividends from shareholdings, rentals from a property being rented out to name a few. It could also be from the royalties from a book. Wherever it comes from, make it work for you by doubling it by channeling it back into investments or savings accounts.
Passive income also means selling a service part-time. For this to succeed you would need to work hard and apply yourself to make it worth your effort. Be willing to make sacrifices of your time and sometimes your social life – you bank account will thank you later.
Portfolio income is income derived from investments and can be viewed as a subset of a passive income. The right kind of investment is a long-term solution to financial freedom. Learn about how they work, invest in a newspaper subscription, and read the financial pages. Become money-savvy. If you’ve invested your money somewhere, you should see how it’s performing. Ultimately, the aim of any investment is to have a return on it or ROI. Patience is key though, and it takes time for an investment to give you the return that makes a considerable change to your bank account. Have you heard the saying, don’t keep all your eggs in one basket? Before you dive into anything, make sure you understand the risk involved and have spoken to a professional.
Benjamin Franklin once said that the only inevitability is death and taxes. The question on your mind should be,
“Have I secured my family financially, in the event I pass away?”
As sobering as it is, it’s a road we all must travel and, as difficult as it is to face losing you, your family need not go through the financial burden of paying off your debt because there was no plan in place to ensure that, that would be taken care of. Do you have a will and testament, have you updated the existing one? Do you have a funeral plan and savings that will take care of your children’s education? These are key areas you must carefully consider for the sake of your family’s financial success.
Dare to ask the uncomfortable questions, and things we do not like talking about. It unlocks the secrets of generations past and opens the door fo opportunity for your generation to come.
Finally, plan to invest in your loved ones by making daily deposits of love and wisdom. Invest time in people who can teach you something you didn’t know about wealth, finances, yourself, and others.
Ask yourself who the 12 people will be around you when you sit around the table at a ripe old age and ensure that you gave them enough of yourself and your love.