Personal financial planning: Develop a good financial plan for yourself at an early age and assure a secure future

Suppose a friend told you that he had made a 10 percent return on his investments in 1984. Is that good? Bad? Should you congratulate him or laugh at him? It all depends on what his goals were and how much risk he was willing to take. Compared to the inflation rate of 4 percent in 1984 he did well. Compared to one measure of stock market performance, the S&P 500 Index, which was up 6.3 percent, he did well. Compared to long-term government bonds, up 15.5 percent, he did poorly. Maybe his expectation was just to keep up with inflation; maybe he took an enormous risk hoping to make a big killing. Your response depends on his investment goals.