Financial Plan

Financial Plan Basics

Financial Plan Basics, the Levels of Competence The 4 Levels of Competence - financial plan - There are four levels of competence to almost everything, and in this case, your financial genius into action. These are the foundations that are the basics of financial plan and personal financial plan.

Unconscious incompetent   Conscious incompetent   Conscious competent  Unconscious competent  Unconscious Incompetent -In everything and not just finances, people who are not only unconscious but also incompetent are usually not able to even help  themselves. Not only do they not have the knowledge or what it takes to achieve something, they also often do have the desire to first learn, which I  personally believe is the single-most important thing one must take in order to climb to the next level of competence…

Conscious Incompetent - This is where you are at right now. After reading the last few chapters in Part I, you are now aware of your financial position  and therefore you can reevaluate your choice in deciding the flow of your money using common “cents”. But just because you are now “pregnant” with the  ideas and facts brought in by this guide, it has yet to make you competent – not just yet!

Andrew Carnegie, pioneer of steel in the early 1900s, said there is a distinction between “schooling” and “education”. He summed the definition of
education as “to draw out your genius or applying information into practice”. Note that Mr. Carnegie was a school drop out and before he entered the game of entrepreneurship, he was working as a laborer. Yet, he was able to tell the difference between “education” and “schooling”, these two terms often and freely misused by the modern school system itself. Just because you have studied living skills and passed the exam paper does not necessarily  mean you know how to fix cars any better than the mechanics at the work shop (who probably did bad at school) until you actually fixed your first car!  On the same token, just because you are now aware of your financial situation, it has yet to make you competent enough to take care of it without thorough  practice and putting the fundamental information in this guide into practice towards improving your financial situation and later pursue wealth.

Conscious Competent - Once you start putting information into application, this will be your next level of personal and financial development.
Not only are you conscious now, you are actually competent enough to take care of your financial problems for the first time! But like riding your
first bike, it would take some time until you can ride your bike without using any hands. That would lead you to being…

Unconscious Competent - You are so used to practicing good money and financial habits that you automatically know what is good or bad for your financial  well being. When an advertisement gets thrown into your face, you already know it is not good for your wallet – you do not need that product after all.  When you make your next batch of money, you automatically set aside at least 10-20% of the income to invest. A financial seminar is around the corner –  it beats conventional school anytime and it makes you richer, so why not go for it?

Bottom Line - My informal survey suggests that a good 80% of the people fall under the first two categories in almost anything, finance included, while  the other 20% are already competent. It is obvious that having only the lessons or information is far from enough in making your financial nightmares gone and financial dreams come true. One word sums it all up well – ACTION!