Amidst the busy vacation, I forced myself to complete reading books. One of the five books is about financial planning. The title seems intriguing; opposite to what normally best sellers have, things like how to become rich, super duper quick ways to become rich, financial freedom in very flash time, etc.
The author, Ligwina Hananto, talked about strengthening the middle class. Middle class is like most people in Indonesia. Average of us: have income, can live proper, can go shopping, able to take vacation once a year, able to spend time in cafe, able to watch movie in cinema. Middle class feel they have enough about their financial issues as it turns out they don’t have proper plan and their power of purchase are not maintained with ability to sustain the life style for longer term.
In summary she recommended that we should have:
– Educational Fund, that enough to compensate for tuition fee increase and inflation. Here she wakes me up that saving does not solve everything. Though I have had two educational saving plans, I still have some homeworks. That I must invest in moderate to high risk instrument for long term plan to be able to meet the always increasing education fee.
– Emergency Fund, that addequate to cover our living expenses during hard time (lay-off, unfortunate events, etc.). For a family with two children, 12 months emergency fund is recommended. This fund is not necessarily achieved in one go. Putting money into gold investment may be a good idea in here. Another homework.
– Pension and Protection Plan, through insurances and pension plan. I think I get them covered although pension plan to be increased to ensure that the current life style can still be maintained in retirement life.
– Personal Fund, for vacation, sharing, charity, or religious intention.
Ligwina also provided readers with 100 steps/checklist financial action plan, from separating monthly expenses with weekly expenses, pay all credit card bills every month, own the first house, to starting to own active asset, and ensuring pension fund achieved, so forth and so forth.
The book makes me scared. But scared that gets me think and take action! Thanks for “pinching me”, Ligwina!