To do no financial planning or to let others (your spouse, employer, broker, or financial advisor) do all your planning is to flirt with disaster. Remember that no one cares more about your financial well-being than you do.



The Internet makes financial planning easier than ever before. The Web has hundreds of online worksheets, calculators, and other tools that can easily put you on the right track. I will shows how you can start maximizing your personal wealth by:

#1 Analyzing your current financial position: After all, you can't get to your financial finish line if you don't know your starting point. The Internet provides many online net-worth worksheets and calculators to make this task easier.

#2 Finding out where your cash is going each month: Your financial wellbeing doesn't depend on how much you make; it depends on how much you spend. If you don't know how much you're spending, the Internet can help you gain an understanding of your spending habits and assist you in creating a budget you can live with.

#3 Deciding your financial objectives: Do you want to purchase a house in five years or to retire early? The Internet can help you achieve your goal by helping you develop a workable plan.

#4 Building your financial base so that you can start accumulating real wealth: This approach to investing offers a diversified system that provides financial growth and protection. Discover how you can build a financial base to maximize your personal wealth.

Saving and investing are different, although savings are often the source of funds for investing. Savings are a set level of funds that you put aside regularly, usually at a low interest rate. You can easily access savings, and often they're insured by a financial institution.

Investment funds are the funds that you don't have earmarked for the rent, groceries, taxes, and so on. You place these funds in securities that can increase or decrease in value. They may earn interest or dividends, but you have no guarantee of increased value or future income. (Investment funds should be free of any obligations. Good examples of investment fund sources are inheritances, gifts, and disposable income.)

The beginning of personal wealth is the accumulation of capital that you can use for investing. This capital often begins with savings and expands into other types of more profitable investments.

Savings are the beginning of your capital accumulation. Families need a regular savings program that's between 5 and 10 percent of take-home pay per month. Some people even manage to put away 15 percent. Getting into a regular rhythm with saving is important.

Additionally, individuals and families need emergency funds. Folks with fluctuating income, few job benefits, and little job security may need to have a larger emergency fund. Families with two wage earners may need a smaller emergency fund.

A general rule is to have three to six months of take-home pay in a savings account (or a near-cash account similar to a market fund with check-writing privileges) for emergencies. If you don't have an emergency fund, you need to increase your savings.

Payroll deduction plans that divert funds into a savings account or money market fund are often the most painless way to achieve the best results. On the other hand, if you've been saving a surplus, you may want to consider using these funds for investing.