Successful Financial Planning: 5 Keys to Achieve Financial Success

Are you worried about your financial future and becoming financially successful? Then, you’re in the right spot!

The secret to financial success is not being lucky, having a good attitude, or having a positive mindset. The truth is, achieving financial success takes a lot of planning and tonnes and tonnes of hard work.

So, if you truly want to work toward your dreams and achieve your goals, the time to start is NOW.

Regardless of your current financial situation, here’s the secrets to achieving financial success.

Let’s look at them…

#1 Set Financial Goals

Perhaps you want to take a vacation when the COVID-19 pandemic has slowed down. Or, perhaps you want to buy your own house in the next 5 years.

Whatever your goals might be, you have a better chance of achieving them if you plan and set financial goals.

So, be SMART about your goals.

As you list your goals, divide them into three categories: short-term, medium-term and long-term.

  • Short-term goals might include buying the latest phone or paying off credit card debt.
  • Medium-term goals could be buying a new car or saving for down payment.
  • Long-term goals might include saving for retirement funds or your child college’s tuition

There is no better way to invest in your future than by saving today!

#2 Pay Yourself First

When you receive your paycheck at the end of the month, always remember to pay yourself first by prioritising long-term financial well-being!

This means, you pay your future self first by saving your money for retirement, an emergency fund and paying off debts before paying your bills, buying groceries and other expenses.

This way, all of the important areas of your life have been covered financially and you can decide on the next step for your finances. Do you want to splurge, save, or invest the remaining money? The most important thing is that your decision benefits you the most in the long run.

But hey, you can use our 50/30/20 simple budget rule to allocate your funds so you would be much in control of your finances and live in a stress free lifestyle!

#3 Saving for Emergency Fund

Perhaps, the most prudent of budgeting is planning for emergencies. Why? Because these unexpected events such as losing your job, having major surgery, car troubles and unplanned travel expenses can be very stressful and costly.

So it’s better to create a safety net account by setting your money aside for at least 3 – 6 months’ worth of expenses for emergencies. As we can’t predict what will happen, it’s best to save your emergency fund in highly liquid and low risk funds. This way, your emergency fund can earn extra returns and you can withdraw your money anytime.

Remember, DO NOT take this money unless there is a true emergency! You want to keep this fund in a separate financial account to avoid temptation.

#4 Make the Best Out of Compound Interest

You might be thinking, saving RM 1,000 per month isn’t a lot for an average Malaysian. However, did you know that RM1000 has potential to make you more money?

The secret lies in the power of compound interest! Compound interest is essentially interest earned from interest earned previously. The trick is you need to find the right platform so that you can make the best out of your idle cash, like Versa.

To make the best out of compound interest to the fullest, it depends on the consistency of how much you put your money per month and the duration of time you save your money in the account. 

In other words, the larger the account balance and the longer you save,  the greater the impact of compounding.

If you are under 35 years of age, this opportunity gives you one of the biggest advantages since you have more time on your hands when it comes to planning for financial freedom. 

If you’re not, still, it’s better late than never!

#5 Seek the Right Investment Opportunity

Now you know a bit of stuff about compounding interest, so which investment opportunities that’ll suit your goals?

Here’s the BIGGEST secret of all..

If you can afford to take more risk and invest in less liquid assets, you can invest in properties, Exchange Traded Funds (ETFs), Crypto or Equities (seek for a professional to meet your investment goals). You can use these to invest in long-term investments for retirement funds and creating wealth.

On the other hand, if you need to invest in less risky and highly liquid assets, you can put your money in either Fixed Deposits (FDs) or Money Market Fund (MMF) for short-term to medium-term investments. With these, you can save for emergency funds, sinking funds and idle cash.

However, investing in FDs and Money Market Fund needs around RM 1,000 – RM 5,000 as initial minimum deposit to begin with. But if you don’t have such high capital but you want to invest in one. Fret Not!

Versa for a Successful Financial Planning

Thanks to advances in technology and today’s Fintech. You can start from as low as RM 1 in a Money Market Fund with a digital cash management platform through Versa. Plus, it’s the simplest and fastest way to earn potential higher rates similar to Fixed Deposits without any lock-in periods with close to zero risk. In order to achieve financial success, you can now earn passive income easily!