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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Ideas for Profit | HDFC AMC posts strong performance in Q3, should investors buy? NULL
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Mutual funds add 68 lakh folios in 2019 However, the pace of growth in folio numbers dropped in 2019 as compared to preceding three years. Industry experts attributed the trend to decline in investors account in debt oriented schemes as they were spooked by credit events in fixed income market.
Tue, 21 Jan 2020 15:14:07 +0530


Modi-Trump meet: Tie-up with foreign firms in defence will benefit HAL, BEL The government’s increased focus on defense is a positive sign for stocks like HAL and Bharat Electronics.
Sat, 22 Feb 2020 12:55:26 +0530


Portfolio play: Gold likely to touch $1,700/ounce levels in 2020, says Umesh Mehta Gold is likely to touch levels of $1700/ounce in the year 2020 and it is a buy even at the current levels if investors are considering it from a long-term perspective.
Sat, 22 Feb 2020 11:40:18 +0530


Small  Mid-caps outperform in a truncated week; 40 stocks rose 10-30% As many as 40 stocks in the SP BSE Small-cap index rose 10-30 percent, including Mirc Electronics, Heritage Foods, Indo Count Industries, JMT Auto, and DHFL among others
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Pankaj Bobade The demand for mid and small caps is likely to improve on the back of improved corporate earnings, cheap valuations and the large inflows seen from domestic investors.
Fri, 21 Feb 2020 08:12:59 +0530


$8-bn footwear industry prepared for a longer run; Relaxo, Bata trade at a premium Among the global footwear companies, barring Under Armour, most of the companies trade at valuations cheaper than that of domestic footwear companies such as Bata India and Relaxo Footwear.
Fri, 21 Feb 2020 08:11:43 +0530


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Thu, 20 Feb 2020 13:05:07 +0530


Q3 earnings, a mixed bag: Brokerages name 15 largecaps that should be on your radar Corporate tax rate cuts continued supporting earnings growth. BFSI and Consumer drove the earnings, while Metals dragged the aggregates.
Thu, 20 Feb 2020 09:55:45 +0530


Market Headstart: Nifty may retest 12,200; experts say traders can create longs on dips Trends on SGX Nifty indicate a positive opening in India, with a 127 points, or 1.06 percent, gain. The Nifty futures were trading around 12,146-level on the Singaporean Exchange.
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Ashish Chaturmohta On the downside, the immediate support is seen at 12,030 and then at 11,900 levels. A break below 11,900 levels will indicate a resumption of the downtrend and decline towards 11,750 levels.
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Domestic companies in pharma sector have evolved: Max Life#39;s Mihir Vora "We were mostly dominated by exporters in the portfolio but now it is a good mix of exporters as well as domestic-oriented companies, who have done a lot of good work in branding and generic distribution," he said.
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Hot Stocks: Affle (India) looks ripe for breakout; accumulate for a target of Rs 2,380 While bias is likely to remain bearish as far Nifty is holding below 12100 levels. Traders should keep a stock-specific action onto the radar.
Wed, 19 Feb 2020 08:20:40 +0530


What changed for the market while you were sleeping? Top 10 things to know Trends on SGX Nifty indicate a positive opening for the broader index in India, with a 40.50 points loss or 0.34 percent. The Nifty futures were trading around 12,059-level on the Singaporean Exchange.
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Tue, 18 Feb 2020 09:53:57 +0530


SBI#39;s credit card business IPO to open on March 2 The company plans to issue new shares worth Rs 5 billion and will offer up to 130.5 million shares for sale, the prospectus, dated February 18, showed.
Thu, 20 Feb 2020 11:45:03 +0530


SBI Cards IPO might be launched on March 2, offer price may be Rs 745-775 per share: Report A report noted that SBI is likely to raise Rs 2,780-2,880 crore with this IPO.
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SBI Cards IPO gets SEBI nod; launch by February end The offer for sale includes up to 3,72,93,371 equity shares by SBI and up to 9,32,33,427 equity shares by CA Rover Holdings.
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ITI withdraws Rs 1,400-cr FPO due to prevailing market condition The Rs 1,400-crore public issue was subscribed 62 percent despite extending the subscription period twice since its opening, and reducing the price band to Rs 71-77, down from Rs 72-77 earlier.
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ITI FPO subscribed 57% on 8th day, retail portion fully booked After the issue, government shareholding in the company will reduce to 74.96 percent from 90 percent.
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ITI extends FPO closing date to Feb 5, keeps price band at Rs 71-77/sh The issue has received bids for 9.8 crore equity shares against offer size of 18.18 crore shares, the exchange data showed.
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ITI FPO subscription remains unchanged at 49% on 4th day The Rs 1,400-crore further public offer (FPO) has received bids for 8.86 crore equity shares against offer size of 18.18 crore shares, as per data available on the NSE.
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ITI follow-on public offer subscribed 49% on third day The reserved category for retail investors has seen subscription of 92 percent and that of qualified institutional buyers 49 percent and non-institutional investors 16 percent.
Tue, 28 Jan 2020 18:49:34 +0530


ITI FPO#39;s closing date extended to Jan 31; price band revised to Rs 71-77/sh The company, in consultation with merchant bankers, extended the closing date for FPO by three more days.
Tue, 28 Jan 2020 16:36:44 +0530


ITI FPO subscribed 9%, retail category subscription at 50% on Day 2 The government#39;s shareholding will be reduced to 74.96 percent, from 90 percent currently after the issue.
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ITI sets price band at Rs 72-77 per share for Rs 1,400cr FPO The funds raised through FPO would be utilised for funding its working capital requirements as well as repayment of existing debt.
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ITI follow-on public offer opens on Jan 24, may raise Rs 1,600 cr The company in its BSE filing on January 19 said the meeting of the board of directors of the company is scheduled on January 22 to consider and approve price band for FPO.
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