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The Life Planning Model

What Is Life Planning?

We all have different needs in the different stages of our life. From the very basic needs such as food, shelter and clothing to other wants, like holidays abroad, cars, a luxurious lifestyle, and the list goes on and on. Our demands are limitless.

However, our needs and wants can be classified into the following major life goals:-

1. Acquiring a home

2. Raising a family

3. Fulfilling children's education needs

4. Comfortable retirement lifestyle

5. Transfer and distribution of wealth according to our wishes

We want to satisfy our needs and wants with our limited resources. The key component in life planning is then to plan our financial resources well.

Why is Life Planning Necessary?

According to a survey done on Malaysians aged 30 today, they will find themselves in one of the following positions at retirement age:-

1. 5% would have achieved financial independence

2. 29% are expected to have passed away

3. 66% will still be financially dependent. They have to continue working and will need financial assistance from their children, relatives or society.

Why Wealth Protection?

Because life is full of uncertainties, wealth protection helps protect you and your family against financial losses either due to dying too young or living too long.

Approximately 70% of your disposal income is spent on:-

• Long and short term debts - house mortgage, car loans, credit cards

• Living expenses - food, clothing, utilities

• Family obligations - child support, children's education, payment to aged parents

• Transportation - petrol expenses, car maintenance, parking & toll charges

• Health and medical needs - dental care, personal well-being

• Entertainment and recreation needs - vacations, hobbies, clubbing

• Miscellaneous expenses - weddings, funerals, donations

Why Wealth Accumulation?

Because of life certainties, you'll need to consider a long term savings plan for:-

• Children's education

• Maintaining your lifestyle at the different stages of your life

• Older parent's filial commitments

Why Wealth Preservation And Consumption?

Because of living too long, you'll need to take care of your personal well being:-

• Retirement and long term health care

• Maintaining your lifestyle during your golden years

Why Wealth Distribution?

To put in place a financial and legal instrument to ensure that the estate owner's wishes are honoured in the most effective and efficient manner.

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This site has been published for residents of Malaysia. All information herein has been prepared solely for informational purposes, and it is not an offer to buy and sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.

Copyright © 2007 Herbert Hor

Last modified: 02/26/09