Title: The Handbook Of Personal Financial Planning
Authors: Oran A. Hall and W. St Elmo Whyte
Reviewer: Mel Cooke

There is a telling quote at the beginning of chapter three in The Handbook of Personal Financial Planning.

In a just over 200-page book (including appendices) by Oran A. Hall and W. St Elmo Whyte, which is liberally sprinkled with relevant quotes, the one by Dan Zedra at the start of the section on 'Goal Setting' resonates.

It reads: "Write it down. Written goals have a way of transforming wishes into wants, can'ts into cans, dreams into plans, plans into reality. Don't just think it. Ink it."

And that is just what Hall and Whyte have done in their handbook, inking a financial path that puts life starkly in black and white for those who would follow.

Not that it is an austerity programme, leaving life bereft of actual living.

Rather, as they write in chapter two, "personal financial planning is the process of organising and managing your financial affairs to realise your lifetime goals."

Goal Setting

And. after they have been through 'Goal Setting', 'Bud-geting', 'Savings,' 'Debt,' 'Net Worth' and 'Tax Planning,' among other topics, the concept of 'lifetime goals' is reinforced in the chapter on 'Pension Planning'.

They write: "This book is not about pensions. However, pension planning ought to be the core of long-term planning for most individuals."

And it has one of the very few (maybe only) screaming bold words through the book, as Hall and Whyte emphasise that "it is your responsibility to make arrangements to provide yourself with the desired level of pension at retirement".

The importance is underscored by the detailed definitions regarding pension that they go into, along with a few calculations (there are some of the latter in the chapter on 'Savings' where they explain "the rule of 72"), in a noticeable departure from the more everyday language of previous chapters.

That everyday language often conveys what should be everyday common sense but unfortunately is often not, hence the need to 'ink it'.

In the chapter on budgeting, for example, the authors offer advice on generating non-cash income by preparing your meals and snacks instead of eating out, particularly at lunch-time (food is, after all, big business for those who sell it.)

Bad debt

Then there is the reminder about what 'bad debt' is from the borrower's point of view - "that which does not generate permanent or long-term benefits to you.

"It is often the loan proceeds used to purchase things which are consumed quickly (meals, vacations); so quickly, in fact, that that you are still repaying the loan after they have been consumed."

Of course, there are some of the wise words which amount to more than street smarts. Like exactly what a universal life policy is - that where "Premiums are divided into two basic portions: one covers mortality or death benefit, the other goes into an investment fund."

Speaking of mortality, if you are afraid of getting older or dying, The handbook of Personal Financial Planning is not for you, as it makes no bones about the finite nature of individual human existence.

Organise life

For those of us who plan to live long and live well, though, the good news is that getting older has its benefits. Hall and Whyte organise life into various phases and 'the pre-retirement years' is the "peak income-earning period".

If you are reticent about organisation then skip this one and keep living ad hoc until the train derails, but if you aren't, the process requires gathering of all documents from titles to financial and personal records through to the near-final 'Inventory of household items', which includes model and serial number, purchase price and where purchased - it is a tedious, time-consuming process.

As the authors say: "The financial planning process begins with organising your personal and financial data and ends with the organised transfer of your personal and financial assets."

Is it worth it?

But it is certainly worth it.

As for those who wait for a windfall to put some money away, Hall and Whyte urge us to treat "savings as a primary expense, not a residual item - what is left over after all other matters have been taken care of."

The book is written in reader-friendly language, without the financial terms that would make instant actuaries of us all.

One quibble, though: an index would be handy near to the bibliography.

The chapters are broken down, but that additional quick-find touch would have been added value.