By Mikhil Valjee
We all dream about that fancy house, flashy car or fun-filled holiday we hope to purchase one day; or maybe it’s retiring early at 30. Too often students think of the destination, but not the journey. Personal financial planning is vital at a young age if you wish to achieve your goals.
A financial plan is essentially a road map on how to reach your goals using financial products and services. These products and services can be explained to you by a registered financial advisor or broker. Your advisor or broker can provide you with financial advice on products and services like life insurance, funeral cover, loans, investments, retirement planning and much more.
An advisor would complete a thorough analysis of your current financial position. This analysis would take into account your goals, plans, preferences, earnings potential, contracts, family and many other factors. These factors would be used to determine your risk profile. Your risk profile is basically your appetite for risk. Your risk profile informs on whether you are willing to experience high risk with high reward or low risk with low reward.
You would generally begin with a few planning sessions initially and thereafter, you would have regular follow-up sessions. Circumstances always change, so your financial plan will be adjusted throughout your life to re-align to your financial goals.
Having a financial advisor is a long-term relationship, therefore it is vital for young people to do their homework and pick and advisor they feel comfortable with. Financial advice from a qualified and appropriately licensed professional is essential if you wish to achieve your financial goals.
Rob Barge, Regional Manager of PPS, advises graduates to start the process of meeting financial advisors and to listen to their value propositions and what they have to offer. Graduates should then introspect and assess whether they could trust the person, and build a lasting relationship with a person as a guide and partner in your life relating to your personal financial and money management. He advises against paying anyone for their services until you are happy with and understand what you are presented with. Rob strongly believes that your best long-term investment in life will be a relationship with an expert and trusted financial adviser.
PPS is company which provides financial advice but are very different to their competitors. They offer unique and specialised products and services for University graduates and Professionals. PPS operates under the ethos of mutuality and all PPS’ profits are allocated to PPS members. It is an interesting business model that is crafted to serve young graduates. Every advisor is different and may not suit everyone. It is up to you to decide the best fit for you.
Personal financial planning is the first step to reaching your goals. You are never too young to start!