PLANNING FOR

FINANCIAL
PROSPERITY AND
INDEPENDENCE

WEEK 3 MODULE 3
LEARNING OBJECTIVES:

1. Know the implication of having financial independence

2. Understand what personal financial planning is
3. Explain how an individual's wealth can be built
4. Give other routes to building wealth
 Achieving financial independence is everyone's goal. If successful, an
individual can maintain a good standard of living without the need to work.
FINANCIAL INDEPENDENCE – a person has sufficient money to be able to
pay for his Iiving expenses upon retirement even without work.

Financial Independence can be achieved by:

 Saving and investing well

 Accumulating enough wealth to live on
 Generating a passive income that will continue paying out when retirement
age is reached
Personal financial planning is the process of identifying lifetime
goals and determining the level and proper management of financial
resource needed to accomplish those goals.

BUILDING WEALTH
Most people begin by earning an income and saving a portion of it to
build wealth, ensuring they have financial security in the future.
To build one's wealth, the following guidelines are considered most
effective:
1. Earn Income
Converting income to wealth. Working to earn an income, whether actively,
passively, or a combination of the two, brings essential money into the household
on a regular basis.
 Active earnings. Savings can maximize money received and workers can
relocate for potentially higher income.
 Passive income. Income can be boosted with investments, and by buying
and selling possessions.
2. Store and Save

A strict household budget will reduce cash outflows, which can then be
reinvested.
• Track spending. Monitoring money going out will indicate where costs can be
cut.
• Set a budget. Sticking to a plan makes it easier for individuals to see the path
to personal wealth.
• Build credit. High savings and low debt ensure a bet credit rating, as does
paying your bills on time, allowing options for future investment borrowing.
 3. Invest Wisely
Investing is a balancing act--the nearer a person is to retirement the less risk
they can afford.

4. Maintain and Manage Wealth.

Decisions made at the start will determine how quickly a person can build
wealth.
OTHER ROUTES TO BUILDING WEALTH
The aim of investing is to make money and there are ways to do it to suit your lifestyle
and interests. This route includes the following:

A. Traditional Investment. Asset values fluctuate with economic changes, so many

investors watch events closely to try to time their investments.
B. Through Property. Residential property can provide capital growth or steady rental
income.
C. In Business. ldeas require little or no investment and there can be long-term
potential. Investing in a start-up can result in big gains, but many fail so it can be risky.
D. Effective Personal Budgeting. Setting and sticking to a budget will help meet
savings goals.
Other savings strategies include:
 Setting Financial goals
 Drawing up a spending plan for expenditures
 Monitoring budgets weekly or monthly to keep track of everything
 Deciding on a percentage of income to save each month
 Shopping with a list to eliminate impulse buys, and buying in bulk in order to
take advantage of cheaper prices or sales.
What is so simple and clear now needs to be learned the hard way, and could take
decades to complete. It is hoped that your path will be smoother, missteps will be
fewer and your own financial freedom will come sooner and with fewer tears.