SOS Secret of finding out Education Funding?

Education Funding

Kid = 3 years old, Assumed 19 years enter Uni, Investment return = 5.058%, Course inflation = 6%

1. Find FV of fee when your kid is age 19.  PV(course fee today), I (inflation), N (no of years to Uni)

2. Find PV[when kid reach 19] (for 3 years course fee) (BGN)  PMT (204,000), I (5.058-6/1.06), N (3 years course) = 826,000

3. Find PV(now required) = PV (826,000), I = (5.058%), N = (years to 19 years = 16)

SOS The Secrets that most people trying to avoid in their life?

Dear readers (not that it exist anyway),

Well, what is the secret?

It is call FP?

When you are sick, who do you go to?

When your car have problem, who will you call?

So, who is FP?

Do you ever spent a bit of time thinking whether you have enough money for your retirement?

Or for your kids education?

Frankly, with such a stressful day you have in work, and busy catching up with your family, who have time for such a thing, trying to find out the ugly truth?

So when you want to find out whether you can achieve your Financial Goals, you consult a qualified Financial Planner.  That is what FP is all about.

Well, in Malaysia, it is still at the infancy phase, typical Asian, shy to reveal their wealth. Scare of being  mug?

No actually, scare to find out that you may not have enough to for your kids education funds and retirement funds.

Well, actually, not that Asian is shy, actually they always wants FREE stuff, even for financial planning.  The first thing is that they will ask, what is the fee?  They never think about the BENEFITS of doing a financial planning.  

So, what is the point of finding out that you may not have enough savings for your kids or retirement?

Did you have a plan if something bad happen to you? Such as Death or Critical Illness? Is your spouse, kids or parents well PROTECTED if you are the breadwinner of the family?

Never bother right?

What happen if you find out your are UNDER coverage for your insurance?

Well, like doctors, FP will diagnose your financial health, talking about your net surplus, savings, debt servicing ratio, liquidity, debt over assets etc, just like testing your blood, if , one you have high blood pressure, high cholesterol, diabetes, other sickness it might shown in your blood or other health screening test.

Similarly, FP is your financial health doctor.  You have to see a FP regularly when to know if you are Financially in good health.

When was the last time you wrote or update your Will?

Can you name or your nominees in your life insurance policies or EPF?

Have you any idea what is your yearly expenses? Or how much you need roughly for your retirement, say you may live up to 80 years old?

FP is actually a PROCESS.

It is a financial planning process, called EGADIM.

E is for establishing and defining relationship with the client.

G is for gathering client data.

A is for analysing and evaluating client's financial information.

D is to develop and presenting the Recommendation

I is for implementing the financial plan recommendations

M is monitoring or reviewing the implementation of the financial plan.

EGADIM is actually all done and reported in the Financial Planning report consisting of:-

1. Executive Summary
2. Personal Data
3. Planning Assumptions (Introduction on EGADIM, the 6 step process of Financial Planning process)
4. Existing Financial Situation (Cash Flow/Net Worth/Financial Ratio/Tax Analysis/Investments/Risk Management/Estate Planning)
5. Achievability of Financial Goals
6. Recommendations and Action Plans
7. Disclaimer
8. Appendix (EGAWII)