There are really three things everyone needs to keep in mind when thinking about their own financial planning: The first is expectations: if you want to live like a king you need to come up with a plan to accumulate enough funds to do so. The accumulation to live like a pauper is much lower. So expectations are very important. The second is accumulating. You need to accumulate commensurately with your expectations. A person desiring to live like a king needs to accumulate great wealth, a person satisfied to live like a pauper requires much less. The third is spending. Each time you spend you need to keep the expectation in line. Spending now may make it harder to live like a king later while spending now may make it easier to live like a pauper. So the three pillars of Financial planning are:
- Expectations
- Accumulating
- Spending
All three require decisions to be made constantly, whether these decisions are made consciously or unconsciously are up to you.
