Once financial goals have been set, certain aspects that must be considered are :

1. Expenditure Budgeting
   Budgets are detailed projections of income and expenses over a specified period of time. It requires a prediction of one's needs at various points. To ensure a proper expenditure budgeting, ways of increasing income and reducing unnecessary expenses must be identified
2. Income
   Income would refer to any amount of money earned.
3. Tax Planning
   Taxes exert an enormous impact on one's personal finances. It reduces cash flow, influences investment decisions made, affects the way borrowing is done, the type of life insurance bought and the method of saving for retirement. An effective tax planning would help one keep the money earned. By taking maximum advantage of tax saving opportunities and by adopting clearly-defined tax plans, will greatly increase the speed with which financial goals are achieved.

   From these 3 aspects, relevant information can be gathered and each data can be individually analyzed before a proper financial plan is determined.

4. Saving
   Based on the income earned, the amount for budgeting and taxation can be determined and allocated accordingly. The amount left over from these would be the saving. There are various savings and investment tools that can utilized in order to save, create and invest money so as to ultimately achieve financial independence.
5. Saving & Investment Tools
   1. Bank Deposits
      These are time or fixed deposits placed with banks for fixed periods with fixed interest rates. Savings accounts, current accounts, fixed deposits, investment accounts, time deposits and offshore accounts are some examples of bank deposits.

      Advantages
      - well regulated by the Central Bank
      - little risk of loss of principal and interest

      Disadvantage
      - low return
      - poor inflation hedge
      - penalties upon early or premature withdrawals (loss of interest)

   2. Life Insurance
      There are various forms of life insurance. They differ on the period of their coverage and how (if any), the cash value builds. Life insurance is a set amount paid upon the death of the insured to the policy's beneficiary.
   3. Investment Linked Funds
      Investment linked insurance offers policies where values are directly linked to investment performance. The premiums are used to purchase funds in one of the insurance company's investment funds. The investment fund can have a wide range of investment modes :
      • real estate
      • equity or stock
      • fixed interest
      • money

      Investment linked funds usually fulfill the objectives of providing the investors with :

      • a comfortable standard of living
      • funds for dependants
      • funds for the education and up-bringing of their children
      • an improvement in their financial position
      • income in retirement
      • funds for paying necessary expenses and taxes when the person dies

      There is a wide range of investment choices available for investing. The more common ones are :

      1. Cash and deposits
         Refers to all liquid instruments that carry minimum risk that the principal amounts invested can be lost.
      2. Fixed income securities
         Are a group of investment vehicles that offer a fixed periodical return. A fixed income security is a security or certificate which shows that the investor has lent money to the issuer (usually a company or a government) in return for fixed interest income and repayment of principal at maturity.
      3. Shares
         Shares are different from stock in that a shareholder is a part owner of the company. A company is a separate legal person, which is owned by all of its shareholders. The value of a share fluctuates according to the market's view of the worth of the company. Others factors too can influence the share prices, such as how the country's economy is doing, the general level of interest rates, inflation rates, company earnings and currency performance.
      4. Unit trusts
         These are useful vehicles for small private investors who do not have sufficient funds or time to receive professional investment management advice. Unit trust investments can generate income in the form of dividends, interest and capital gains.
      5. Investment trusts
         An investment trust is a company registered under the Companies Act. An investor is therefore purchasing shares in that company. The company itself will invest in a wide range of equities and other investments. With a unit trust however, the investor buys units in the trust itself and not shares in the company.
      6. Properties
         There are 3 types of real estate investments : the agricultural property, the domestic property and the commercial / industrial property. Properties can provide good capital appreciation and a steady flow of income. They are considered low risk investment.
      7. Derivatives
         Derivatives are financial instruments whose values are linked to the price of underlying instruments in the cash markets. For example, a stock index future is linked to the performance of a specified stock market. Stock options and financial futures are 2 popular derivative instruments for investors.
      8. Commodities
         Commodities can be bought as physicals where the goods exist and are delivered immediately or as futures, where the goods may not yet exist and will only be delivered in the future. Commodity prices can be very volatile as they depend on supply and demand as well as on the other variable factors such as the weather or unexpected pest attacks. For example, a new pest may reduce a crop, thus greatly increase prices for the crop to be harvested in a few months time. Large profits can be made from commodity futures and equally large losses can be incurred too if things go wrong.
      9. Life insurance
         Life insurance can be intimately connected with the national interest because it is a means of reducing financial distress that death may bring. It is also a method of saving and to a degree, of investing. In other words, life insurance is like a pool of funds into which a large number of policy owners jointly contribute in relation to their risk exposures, in order that a specified sum of money will be paid from the pool on the death or other emergencies dependent on human life. There are 4 basic forms of life insurance cover :
         • term (or temporary) insurance
           (which is the simplest and cheapest).
         • whole life insurance
           (the sum assured is payable on the death of the life assured).
         • endowment insurance
           (the sum assured is payable at a maturity date or at death of the life assured before that maturity date)
         • annuity
           (annuity has a basic function of systematically liquidating a fund which has been created).
      10. Annuities
          Annuities are the opposite of insurance protection against death. It is a contract where, for a cash consideration, the insurer agrees to pay the named life annuitant, an agreed upon sum, called the annuity, on a periodical basis during a fixed period of time or for the duration of the survival of the designated life. This is done with the understanding that the principal sum shall be considered liquidated immediately upon the death of the annuitant.
   4. Unit Trusts
      A unit trust is a pool of funds contributed by many investors kept in trust by a trustee. Are useful vehicles for small private investors without sufficient funds and time for professional investment management. Investments in unit trusts generate income in the form of dividends, interest and capital gains. Advantages
      • spread of investments open to unit holder
      • lower risks and more consistent returns
      • professional investment services and research by fund managers
      • income from dividends can be reinvested
      • lower volatility and costs
      Disadvantages
      • wide selection of funds which can be confusing
      • extra costs/charges to be paid when switching funds
   5. Bonds, Debentures & Others
      Bonds are effective financial instruments used by the government to borrow money from the public. These bonds can be classified through maturity periods : - short term bonds (less than 5 years to maturity) - medium term bonds (5-10 years to maturity) - long term bonds (more than 15 years to maturity)
      Advantages
      • very safe and very marketable
      • income for future years are guaranteed
      Disadvantages
      • capital can be eroded in times of high inflation
      Companies can also issue bonds or loan stocks. There are 3 types of corporate stocks :
      • debenture stocks
      • loan stocks
      • convertible stocks
      Advantages
      • higher return of corporate bonds
      • more marketable and can be sold for capital gains
      Disadvantages
      • higher risk
      • not as secure as government bonds

      Debentures are secured loans to a company. It is usually a fixed charge on the company's property or some of its assets such as trading stock.

   6. Listed Shares
      When one is in possession of shares, one is effectively part owner of the company. The value of a share fluctuates according to the market's view of the worth of the company. Share prices can also be influenced by other factors such as a country's economic performance, general level of interest rates, inflation rate, company earnings and currency performance.
      Advantages
      • investors participate directly in the company's future
      • good dividends and capital appreciation
      • can be traded in the open market
      Disadvantages
      • High risk
      • Highly volatile
   7. Business Venture
      There are many types of business ventures namely, sole proprietorships, partnerships and corporations.
      Sole proprietorship - control and independence
      Advantages
      • secrecy
      • ease of information and dissolution
      • ownership of all profits
      • minimum capital required
      • certain tax savings and benefits
      Disadvantages
      • unlimited financial liability
      • lack of continuity
      • limited financing and capital
      • management limitations and size restrictions
      
      Partnerships - ease of formation and organization
      Advantages
      • management flexibility
      • increased financial capacity.
      • legal status and broader management base
      Disadvantages
      • unlimited financial liability
      • lack of continuity and size limitation
      • partner conflicts (divided authority)
      • dissolution problems and capital restrictions
      
      Corporations - limited financial liability and large in size Advantages
      • permanence and separated legal entity
      • increased financial capacity and specialized management
      • ease in expanding and raising capital
      • transferable ownership and tax advantages
      Disadvantages
      • expense of formation and organization
      • legal and charter restrictions
      • taxation
      • closely regulated and difficult to obtain credit
      • little secrecy
   8. Property
      Properties are real estates , namely agricultural property, domestic property and industrial property. Advantages
      • provide good capital appreciation
      • steady flow of income
      • low risk investment
      Disadvantages
      • difficulties in disposing off during recession