Personal Financial Planning

His wife, Veronilyn P. Ocampo, is a registered financial consultant and together with Marcial, founded the Life’s Quest Management & Investment Consultancy. Their team after an initial interview and fact finding will prepare a personal financial plan that covers the following planning activities: cash flow management, net worth management, risk management and insurance planning, education planning, income tax planning, estate tax and conservation, investment planning and retirement planning.

Their tools include document and spreadsheet templates that culminates in a financial projection of income, expenses, cash flows, assets, liabilities, net worth and estate tax liabilities from current age up to age 80. As a minimum, two scenarios are examined, namely: current cash flow scenario and revised cash flow scenario. A revised cash flow aims to provide a larger positive cash flow to provide investments to fund retirement income needs. A positive cash flow arises from increasing income, reducing expenses, re-structuring debt from short-term high-interest to long-term low-interest debt, pre-payment of debt using low-interest investments, etc.

If the projected net worth after retirement age (usually 60) and up to 80 years old shows a stable net worth (steady or increasing over time), then the retirement of the individual is deemed sustainable. If the net worth decreases over time, especially after retirement, then the individual does not have a sustainable retirement future.

This concept of personal financial planning may also be extended to companies that desire to have long-term existence. To monitor the financial plan, a real-time general ledger accounting system was also developed to provide month-to-date and year-to-date income statement (P&L), balance sheet, trial balance, general and subsidiary ledgers, cash flow statement, uses and sources of funds, and comparative reports (income statement, balance sheet, cash flow).