Risk Management, Personal Financial Planning: Is it Really Possible to Make Money from Them?
Informed personal financial planning and risk management services are two subjects that we should all try to understand
In the words of Andy Warhol, “Making money is an art, working is an art and the best art is good business”.
What about being smart with your money and avoiding risks?
Risk Management
Risk is a necessary and ever present aspect to development. It is when you identify, analyze and accept that an investment might not give the expected returns.
A risk management service provider is a company that offers financial insurance .
How to manage risks;
- Avoidance- There are instances in which avoidance works.
- Reduce the impact of the risk
- Transfer the risk , for example insurance is a way of transferring risks to a different organization
- Acceptance
Why personal financial planning is all about you.
Personal financial planning enables you responsibility and accountability for your money. Budgets, expenditures, savings are all up to you. You should also be aware of financial risks and plan for the future regardless of this.
This helps you always have a plan for the future in mind and make wiser decisions.
Would you like to know more about personal financial planning?
Identify your financial position
Be clear on what your income is and expenditure. How much do you manage to save?
Saving is the most important step in personal financial planning. Here is a thought, allocate a percentage to save from your net salary as part of budget.
Make necessary adjustments on expenses.
Saving shouldn’t be an afterthought.
Come up with a financial goal
Goals are important because they keep you focused on your journey.Your personal financial goals should be SMART.
Are there alternatives?
There is more than a single way to achieve your set goals. Compare the risks of a course of action you intend on taking. Better yet, have a list of alternatives to choose from. Research on them and be sure you are well informed and prepared before making a decision.
Implementing your financial action plan
Be prepared for and open to change. Adjust your plans when possible with the goal in mind.
As you prepare to gain your financial freedom, remember to start small, think big and be accountable to yourself.
What are some of the risk management strategies you have in place? What personal financial planning practices are you well acquitted with?
