There’s a huge misconception that surrounds; some people believe that they are only designed for the ultra-wealthy. In other words, if you don’t fall into that top-1% of the country, what’s the point in putting any sort of financial plan together?
Well, we’re here to dismiss this notion. Many experts believe that the best way for a person, or family, to make the “step up” into the next income bracket is to plan accordingly. Such planning can start as early as in your 20s – at least by doing this, you don’t have to save quite as much in one swoop.
Whether or not we see more people approaching the likes ofand other financial experts for this reason remains to be seen. If you are sat on the fence in relation to the topic, let’s take a look at some of the most proven reasons yet how financial plans can help absolutely anyone out there.
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You will start to identify risks that never crossed your mind before
One of the primary reasons behind a solid financial plan is that it allows an individual to look at the full picture of their finances. If everything isn’t laid out in front of you, it’s hard to look at it from several perspectives. One of these points-of-view is risk.
Sure, you might be ticking over just fine now, but what are the risks that could scupper your future? What might happen if you suffer an accident and are lose your main source of income? How are your family going to cope if you died?
Some might class these questions as morbid, but they are extremely valid. It might be as simple as putting together a will, but it can just be something to safeguard your future. Without a plan in place, few of us think of these scenarios and risks.
You can make your money go further
Similarly, having the chance to sit down and effectively have all of your money in front of you can open up a whole host of opportunities.
When we talk about such opportunities, it could be as simple as taking advantage of one of the schemes that might be offered through your place of work. It might be something along the lines of a salary sacrifice scheme which allows you to pay for health care, from your pre-tax earnings. Alternatively, it might be a 401(k) which as the experts will tell you, is one of the most effective ways to maximize money for most people. Despite this, few people do it – simply because their finances aren’t laid out in front of them and they can’t see how to get the most out of their situation.
Studies have shown it can build your wealth
We’ll conclude this piece with a little statistic; studies have shown that those people who do take advantage of a financial plan are more likely to live “comfortably”. In fact, one study showed that even if a person was earning $100k annually, they are less likely to live as comfortably as someone earning $50k annually but using a financial plan. In truth, little else needs to be said beyond this fact.