"If somebody asked me to briefly answer the question of why you need a personal financial plan for a person, I would have responded as follows: in order to build the optimum balance between your today and future financial situation" says Ian Filippini.
According to Ian Filippini, Each person in your life to make a choice between two alternatives: to live well in the present or a good life in the future.
If we want to live well in the present, we spend a lot of current expenses and lay off a little and invest. This allows us to get maximum pleasure now but makes vulnerable and doomed to poverty-stricken old age in the future. If we want to live well in the future, we are investing a lot of delay and little is spent on operating expenses. It gives us confidence and comfort in the future, but for that you have to sacrifice your standard of living in the present.
"So how much and how long to delay and invest? A "The less, the better” is wrong. "The more, the better?" The answer is wrong too. Both positions are extremes and I'm not going to persuade you to any of them. I urge you to seek another reasonable compromise between the first and second alternatives" Ian Filippini clarifies.
The problem defined by Ian Filippini is that the vast majorities of people that are committed to live do not put off anything later and do not invest. Incidentally, this is not always conscious. Very often, people just do not want to think about what inevitably awaits them in the future. And often turn a blind eye to the problem that is fenced off from general phrases like "there is nothing to invest and do not have enough money. The problem is of course does not solve but only defers to the period of life when the powers and resources to solve it no longer then poverty-stricken old age will become inevitable.
People who hold the second view also occur but much rarer.
Again, a reasonable position is to find a balance between the first and second embodiment. Do not compromise the full life yourself now and also do not forget to create a foundation for the future.
And if you agree to this position, then in front of you the question arises: how much and how long you have to set aside and invest in order to achieve the desired goals in life?
In Ian Filippini opinion, The General answer to this question is no, the answer is different for each person and his life situation, and depends on what investment objectives that you want to achieve and at what standard of living in old age you want. Knowing the historical landmarks to the return of various financial instruments, you can provide a reasonable compromise between a decent life in the present and the achievement of the planned investment purposes in the future.