Financial Planning

A financial plan is the road map for your financial life. It covers major financial areas of your life addressing aspects such as cash flow, savings, debt management, risk management, childrens education planning, taxes, retirement, estate planning, and of course, investments and a strategy for managing them. It is more than a guide. It is a written strategy that gives you a clear, pragmatic path to follow towards the accomplishment of your most important financial goals.

Having a financial plan is like having a travel plan - it identifies where youre going, how and when youll get there, how much will it cost, and things to do along the way. A personal financial plan looks at where you are today and where you want to go. Then it sets out all the steps you need to take to get there. Everyone who is earning should draw up a financial plan. The plan will help you get the most from your money and help you in achieving your financial goals in life.

Some people naturally resist the process of creating a Financial Plan. Initially, it seems overwhelming and/or just too much of trouble. However, the potentially devastating consequences of not having it are far greater than the initial discomfort that you experience of the process. For most people we have worked with, the hardest part is just making the decision to get started. Once the process has begun, most clients find it engaging and interesting.

Do you need financial plan?
Yes - if you have an income, a family or planning to have one in the future, retirement dreams, and for many other financial reasons / goals that are unique to you. No one can predict the future but one can certainly be better prepared for it. An effective financial plan will make sure that you are financially prepared to deal with the unexpected events and stormy times. If you dont have one, youre more likely to end up in a financial mess. On the contrary, if you have one and the recommendations thereon have been executed, most of your financial goals will be satisfactorily met. A good financial plan can alert you to changes that must be made to make sure a smooth transition through lifes financial phases, such as decreasing spending or changing asset allocation.

By developing a financial plan you and your family:

  • Will have a better understanding of your current financial position.
  • Determine attainable retirement, education, insurance, and other financial goals.
  • Review goals, funding strategies, and alternatives to balance all goals.
  • Have the necessary financial resources set aside to fund your goals as they occur.
  • Reduce the effects of unexpected events such as disability, premature death etc.

You need not be very rich to have a financial plan. No matter how much you earn and at what age, a plan is important to make your life easier. As your financial situation influences almost every aspect of your life, a regular financial plan can help give you peace of mind and protect you from unforeseen, unfavorable situations. Once you have a working personal financial plan, you can use it to make informed financial choices. Having a good financial plan will allow you an over view of what you can afford. It will allow you to analyze your wants versus your needs. It also provides you a way to see how to avoid major financial mistakes in the future.

Risks of not having a financial plan:
You may be able to achieve what you want today but might not be able to achieve what you need few years down the line. Say, if you buy a new car now, you might not have enough funds later to buy your dream home.

You may not see the big picture. Say, you may grow your wealth by making good investment choices but end up being tax inefficient and pay more taxes than you need to.

You may take a short-term view of an opportunity and make rushed financial decisions, or fall into some scam trap. Worst of all, you may end up doing nothing (and just thinking of doing something) and never achieve your financial goals.

You might become a victim of mis-selling and build a corpus of investment products that neither suits your financial needs nor your risk profile.

You are very much likely to worry more about money and financial security. You may not know where you are today and where are you heading for.

Tips for Effective Financial Plan

  • Be realistic with your investment returns; dont plan to outperform the markets.
  • Account for market risk and dont assume the same return to repeat every year.
  • Dont forget to plan for inflation, taxes and your financial planners fees.
  • Review your financial plan regularly to see if you are on track or need any changes in the plan.

The need for financial plan is all the more very important in the turbulent economic times of today. If you dont have one till now, dont delay any more and Get it Now. Dont be self-satisfied that you will be okay whatever happens. Face the reality. Unless you develop a financial plan early, it will be too late.

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Equity MF inflows improve slightly in May, SIP flows remain stable MFs received net fresh flows of Rs 76,989 crore in April, mainly driven by stable inflows into liquid funds and modest equity figures.
Mon, 10 Jun 2019 16:46:25 +0530


Budget Snapshots | Mutual funds would be happy if LTCG exemption is restored NULL
Mon, 10 Jun 2019 12:58:15 +0530


ADAG#39;s exit from Reliance Nippon AMC to allay investor fears, may trigger re-rating While a rightful discount to HDFC AMC is justified, RNAM is trading at a significant discount, which we think should now narrow following the change in parentage.
Fri, 24 May 2019 16:33:16 +0530


Equity MF inflows muted, but SIP inflows hit an all-time high in April Market reforms introduced by SEBI such as reduction of total expense ratio and introduction of direct plans have attracted retail investor
Thu, 09 May 2019 16:21:57 +0530


Shailendra Kumar From a portfolio perspective, adding good quality domestic cyclical continues to be profitable.
Tue, 18 Jun 2019 12:51:14 +0530


Sanjiv Bhasin We are very selective in NBFCs as the dust has to settle with the churning out of the "men from the boys", says Sanjiv Bhasin
Tue, 18 Jun 2019 12:19:37 +0530


Prasun Gajri The earnings growth is still not broad-based and the economic slowdown will have a larger impact on mid and small caps. Hence, we will wait for better entry levels for small and mid-caps.
Tue, 18 Jun 2019 12:08:36 +0530


Hrishabh Sanghvi Backtest cycle can give you improvised results of this basic strategy, it’s easy to fall into the trap of “curve fitting”.
Tue, 18 Jun 2019 12:05:47 +0530


Nifty can extend fall towards 11,450-11,500; here#39;s why Exide  India Cements are top sell ideas Nifty is in a short term downtrend and can extend the fall towards 11,450-11,500 zone. One should remain bearish in Nifty with the stop loss of 11,800 on closing basis.
Tue, 18 Jun 2019 11:13:15 +0530


Aditya Agarwala A sustained move above 11,620-11,590 can trigger short covering rallies to levels of 11,830-11,870.
Tue, 18 Jun 2019 10:40:10 +0530


Did you notice? SBI Life Insurance, Shree Cement entered $10 bn club in 2019 Shree Cements and SBI Life entered the $10 billion club in 2019, while JSW Steel and Vedanta which were quoting a market capitalisation of over Rs 69000 crore on December 31, 2018, failed to sustain momentum and are out of the club.
Tue, 18 Jun 2019 09:18:37 +0530


Not very positive on public sector banks: Franklin Templeton On auto stocks, Franklin Templeton#39;s Sukumar Rajah said: "I think there are structural changes that are happening."
Mon, 17 Jun 2019 17:43:40 +0530


Bhavesh Sanghvi The Indian market will retain its attractiveness based on one major factor, that is differential returns, which it is likely to generate, despite even a moderately depreciating currency, said Bhavesh Sanghvi of Emkay Wealth Management
Mon, 17 Jun 2019 15:14:34 +0530


#39;Sticking to largecaps safer than betting on midcaps till Budget#39; The major trend is bullish and the minor trend for Nifty is sideways. For next week, the Nifty is expected to consolidate in the range of 11,750-12,000, said Romesh Tiwari, of CapitalAim
Mon, 17 Jun 2019 10:48:26 +0530


Despite its share price doubling in less than 3 years, Varun Beverages is only warming up Analysts are counting on the stock to unleash its true growth potential in India after the beverage major acquired PepsiCo franchise rights in West and South India.
Fri, 14 Jun 2019 12:02:53 +0530


Morgan Stanley overweight on 6 stocks which could return 6-49%; do you own any? In case of banks, Morgan Stanley believes asset quality and loan growth are expected to be strong which will drive their earnings going ahead, especially after facing problem on asset quality front for past several quarters.
Fri, 14 Jun 2019 12:02:26 +0530


Lalit Nambiar One should first start with the asset allocation. Based on risk appetite and investment horizons, one should allocate towards direct equity, equity MFs, debt MFs, FDs and physical assets like gold and real estate, says Lalit Nambiar of UTI MF
Fri, 14 Jun 2019 10:23:30 +0530


#39;Have realistic expectations from Budget 2019; fiscal spending to increase#39; Auto sector is facing a severe cyclical slowdown owing to overall weaker domestic demand, slowdown in NBFC lending and weaker global demand. Given the sharp correction in sales, it is possible the worst could be behind, said Ashutosh Bhargava of Reliance Nippon Life AMC
Thu, 13 Jun 2019 12:37:56 +0530


Impact of SEBI’s crackdown on mutual fund fees—A case study A SEBI guideline for capping TER was put in place in 1996, which has been obsolete long back. The new SEBI guideline for capping fees went live from April 1, 2019. Mutual funds TER since then has seen a negative trend
Thu, 13 Jun 2019 11:33:56 +0530


Bumper debut: Neogen Chemicals ends with 23% premium at Rs 264 At closing price, Neogen#39;s market capitalisation stood at 614.98 crore
Wed, 08 May 2019 16:45:39 +0530


Strong listing: Neogen Chemicals debuts with 17% premium at Rs 251 Thanks to the heavy buying, the stock was locked at 5 percent upper circuit
Wed, 08 May 2019 10:06:54 +0530

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