To play with my file, you need to enable macro in your excel. Beside, I have set a time limit of using the buttons (macros) to 4 April 2009 in order to avoid someone from re-distributing it without my knowledge. If you want to play with the buttons beyond 4 April 09, pls feel free to drop me a note & I will extend the time limit for you.
I would like to take "Education Fund Planning" for an example to show you how to play with my file.
1. Open the excel file & go to "Education" sheet.
2. Fill in the "Birthday"s of your kids.
3. Fill in the "Start Age"s of your kids. This is the ages when they start to "draw money".
4. Fill in the "Duration"s. For example, if they need 4 years expenses, put 4.
5. Fill in the "Annual Fee". This is the annual education fee at current rate.
6. Fill in the "Inflation Rate". Put whatever you think the average inflation will be. I think 5% is a reasonable guess.
7. Fill in the "Initial Value" under "Additional Plan" if you want to start your saving plan with certain amount.
8. Fill in the "Annual Rate of Return" under "Addition Plan". This is your expected annual return. Be realistic for planning. Something between 5% to 10% is good for planning.
9. Finally, press the "Find Contribution" button. Then, your required monthly contribution will be calculated under "Addition Plan".
You may try different "Annual Rate of Return" & press the "Find Contribution" to feel the power of compounding. If the monthly contribution is affordable, go ahead with it. Otherwise, reduce the value & press "Find Rate of Return". This will calculate your required rate of return at your given monthly contribution. Again, pls be realistic. Too high rate of return may not be achieved.
The most important success factors for your plan are:-
a. Select the funds that have good potential gain in the future. (I prefer investment-linked products for better long-term return. hehe)
b. Construct a portfolio that matchs your expected return & risk level.
c. Monitor your plan regularly, say quarterly or half yearly. Change the portfolio if necessary.
d. Last but not least, be careful of the unnecessary plan charges. There are many similar products available in the market. It is common that they will have some "basic" contribution plus "additional" or "top-up" contribution. Try to maximize the additional/top-up portion while minimize the "basic" contribution where heavy charges will be applied. Be Extremely Careful!!!
I wish you a good financial planning for your life. If you need further info/assistance, pls feel free to drop me a note.
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