Strategic financial planning is a detailed process that investors use to plan for their retirement. While there are many viable methods available to reach such goals, experts within the field have determined that there are essentially three keys that will determine the overall success in most cases of strategic financial planning. The first key is investing in commodities that will steadily increase in value over a long period of time. The other two factors may come as a surprise, though: start investing at an early age and become debt-free as quickly as possible. Each of these factors plays a massive role in building financial wealth over the course of a lifetime, and delaying any one aspect could easily result in a much less comfortable retirement.
Whenever investors think about strategic financial planning, the first thing that usually comes to mind is the stock market. While there is plenty of money to be made on the US Wall Street, experts agree that a large amount of a person's overall wealth at the age of retirement often comes from many other sources. Owning real estate outright has always been a highly profitable venture, and commodities like precious gems and minerals has statistically been equally as lucrative. Dividing an investment portfolio into many different areas is perhaps the easiest way to build wealth in any economy.
The age at which an investor first starts thinking about strategic financial planning also plays a crucial role in their average age of retirement. If a mere $20 US Dollars (USD) were set aside weekly for 20 years and collected an average of 10% annual interest, it would amount to a total of $188,200.00 (USD) saved. Double that equation to 40 years and the net savings would jump to $506,300.00 (USD), which would be a comfortable amount for many middle-class families to retire with. Compounding interest can be an investor's best friend or a debtor's worst nightmare.
Perhaps the most crucial aspect of strategic financial planning is doing everything possible to avoid paying high-interest rates on long-term loans. For example, if a $200,000.00 (USD) home was purchased at 7% interest on a conventional 30-year loan, the homeowner would eventually pay $479,016.00 (USD) if every single payment was made on time. Since the average family purchases two to three homes throughout a lifetime, it would be relatively easy to waste a $1.5 million (USD) on interest alone once all of the residences, vehicles, credit cards, and other lines of credit are considered. Remaining debt-free is a massive part of strategic financial planning that opens up many great investment opportunities over the course of a consumer's lifetime, so it should always be the utmost priority whenever physically possible.