We’re often told we need a financial plan, but what exactly does it cover and how do you draw it up?

In this episode Rachel Waterhouse from the Australian Shareholders Association explains that a financial plan gives you a clear idea on where you are headed and how to get there.

She suggests approaching the task by setting or reviewing your financial goals. Ensure you have a realistic budget in place and are spending less than you earn to provide money to invest or to cover unforeseen events.

If superannuation is part of your investments, review the performance of your super fund, and the fees charged. Research investment opportunities such as shares or review your current portfolio. Make sure your estate planning and tax affairs are in order.

Finally, Rachel Waterhouse advises that you need to understand your own risk tolerance and only invest in what you understand. There are many resources available to help you get started.


Useful links  –

Setting financial goals

Moneysmart: develop and investing plan

Australian Stock Exchange: Investment Goals and Risks

CHOICE: articles on financial planning

Wikihow: how to create a financial plan

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