Column: Myron On Authentic Financial Planning

May 4, 2024 | 0 Comments

[Opinion column written by Martha Harris Myron]

Every successful economic entity: a country, a government, a business, and yes, even an individual includes these tangibles into their very thinking in planning for the future. Necessary and seriously, more in depth than just a bunch of numbers on a bottom-line financial statement, they are:

  1. A Contingency plan
  2. A Debt management plan
  3. A Complete Net Worth Picture
  4. Actionable Change = Implementation

A financial plan can never be complacent, rest on past laurels, successes, and the all-to-common ‘this is what we’ve always done’ sort of thinking.

That was what worked then, but it is not/will not work now. Many an entity has fallen on hard-times because they did not anticipate or plan for change.

Contingency [rainy day] planning for change becomes an absolute must as it is the setting aside of money in case of an economic downturn, a business competitive challenge, or a personal catastrophic event.

This contingency big-picture thinking provides some financial, emotional, and mental security survival in disruptive times – until equilibrium and normality returns.

A balanced budget is meaningless if it does not include a contingency rainy-day component, but not at the expense of depleting other reserve accounts.

So, can anyone tell me why and what are the changes in the Government Sinking Fund [GSF] reserve account?

A sinking fund is a financial tool that serves as a safety net for long-term debt obligations. It is essentially a reserve account set up by an entity, such as a government or corporation, to accumulate funds over time in order to repay a specific debt or investment, ensuring sufficient funds available when the debt matures or the investment needs to be redeemed. By setting aside money regularly, the entity can avoid the need for large lump sum payments and reduce the risk of defaulting on its obligations. Fast capital.

Is the GSF now non-existent and the monies used to pay daily expenses? Do we even have a contingency fund, or a special reserve fund?

I’m confused, aren’t you, too?

What are the real facts?

If you don’t like what you are experiencing economically, ask questions, get the real facts, be persistent, think independently on how you and your family will need to plan for an unknown future.

Complacency or change – your choice.

Enough said.

- Martha Harris Myron is a born Bermudian US/UK national and an international pondstraddler finance journalist.

She is relaunching the monthly Bermuda PondStraddler Finance Blog and is currently working on various Financial Literacy media projects and new Bermuda financial literacy primers at PondStraddler Life Productions.


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