Good financial planning is the secret to wealth creation

By Peter Kamuri

The wisdom of the wise reveals no shortcuts to wealth creation. The shorter routes you might use to create wealth are often laden with risks, which in the long run, can be costly.

However, one way to accumulate wealth is by having good financial plans. This is about putting in place prudent financial management practices that can help one meet financial obligations and future plans.

Justus Ogeto, a financial expert and part time lecturer in a private university within Nairobi says good financial planning should start with one’s ability to live within means.

"Good financial planning means you are living within your means. This cannot happen if you are not financially responsible. Those who are able to accumulate wealth spend less than what they make," says Ogeto.

Making sacrifices

Ogeto notes that this does not always come easy. "You must be committed to your course and be ready to make sacrifices. Many fail because they do not take the process seriously."

"That is why you should establish a method that can help you to save money. One such way to achieve this is by coming up with short and long term goals that you intend to achieve. However, good planning is imperative as you must identify goals that are realistic and achievable," advises Ogeto.

"To succeed in coming up with a good financial plan, you need a budget that will work for you. This will help you know the expenditure and the duration it will cover - whether daily, weekly, monthly or yearly," advises Ogeto.

good records

He adds, that unless one has inherited some wealth, good financial planning is about growing income and reducing expenses. So focus on overcoming the challenges that could be holding you back."

"Good financial planning will also require you to keep good financial records. Many find it difficult but they forget that keeping track of what you earn and spend is a sure way to live within your budget," says Ogeto.

Ogeto, however, cautions that though good financial planning is the best way to create and accumulate wealth, it comes with commitment.