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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Big bet on SIPs: MFs garner over Rs 49,000-cr in Apr-Sep FY#39;20 A total of Rs 44,487 crore was collected through such investment plans in April-September 2018, as per the Association of Mutual Funds in India (AMFI).
Mon, 14 Oct 2019 08:05:04 +0530


Baroda AMC, BNP Paribas AMC to merge BNP Paribas Asset Management is a subsidiary of BNP Paribas Asset Management Asia.
Fri, 11 Oct 2019 22:32:05 +0530


It is a pause and not a reversal! Experts see Nifty at record highs in 2019 Technical experts feel that the trend favours consolidation in the near term, but bulls should be able to push the index towards record highs in the next few weeks.
Mon, 18 Nov 2019 13:01:39 +0530


#39;Data#39; is the rising factor for Alternative Investments in India Data in the current world is tricky and its usage even trickier for investment purposes. The usage of data should not fall under the ambit of phishing or invasion of privacy.
Mon, 18 Nov 2019 11:21:33 +0530


Ajit Mishra Indications are in the favour of further consolidation and we expect the Nifty50 to hover within 11,700-12,100 range in the coming week
Sun, 17 Nov 2019 07:48:06 +0530


Deepak Jasani Retail investors should learn from market moves, and may also want to upskill themselves regarding the ways of the markets, and individual stocks’ financials/valuations.
Fri, 15 Nov 2019 10:10:57 +0530


Muthoot Finance share price rallies 8% on stellar Q2 results Muthoot Finance share price jumped by more than 8 percent in morning trade on Thursday to reclaim Rs 700 levels, a day after it reported a 76.4 percent jump in consolidated net profit at Rs 908.54 crore in Q2.
Thu, 14 Nov 2019 10:02:13 +0530


Rahul Jain The recovery in headline GDP number will be gradual but real economic activity will revive in the ongoing quarter, says Rahul Jain of Edelweiss Personal Wealth Advisory.
Wed, 13 Nov 2019 11:58:46 +0530


Economic data disappoints: Did you make a mistake in investing when Nifty50 hit 12K? The market is on track to hit fresh record highs and the rally could well extend towards 12200 to 12600 on the Nifty which translates into a gain of nearly 6 percent from Monday’s closing of 11,913.
Wed, 13 Nov 2019 10:03:33 +0530


#39;Bank Nifty may test 33,200; invest in these 4 stocks for 1-2 yrs#39; The outperformance of banking has seen in the market so chances of moving closer to 33,200 can be seen. If it sustains above that then further progress will be seen.
Tue, 12 Nov 2019 13:24:48 +0530


Investors should look at bottom-up investing with max 15-20 stocks in portfolio I have reasons to believe that if the economy does well and I think it would, MFs performance in the next couple of years would be significantly different from the benchmark.
Tue, 12 Nov 2019 10:36:30 +0530


This smallcap debt-free company has given 1,000% return in the last 10 years This company#39;s high growth potential, debt-free status, healthy operating cash-flow and a strong order book makes it a preferred buy among analysts.
Tue, 12 Nov 2019 07:51:47 +0530


#39;Sharp correction unlikely; H2 FY20 could be relatively better than the first half#39; Constant reform agenda, better fiscal discipline, kickstart in private capex, last mile funding initiatives are some of the key levers for markets to continue the momentum to higher highs in the coming year.
Mon, 11 Nov 2019 17:55:01 +0530


Auto companies still not out of the woods: Harsha Upadhyaya, Kotak MF Upadhyaya said the house is hopeful of a turnaround in the mid and smallcap stock performance.
Mon, 11 Nov 2019 13:54:43 +0530


Mark Mobius bullish on gold, asks India to issue bonds for growth Talking specifically about India, Mobius said he is upbeat on domestic-oriented manufacturing of infrastructure, consumer-spending, as per capita income is going up.
Mon, 11 Nov 2019 12:04:49 +0530


Ajit Mishra India Inc. has put up a dismal show on an absolute basis (barring banks) considering the slowdown witnessed across sectors. However, if we compare the expectations, earnings have fared relatively better
Sun, 10 Nov 2019 07:35:07 +0530


Moody’s outlook shift unlikely to change things; Bulls will make an attempt towards 12K  There might be the minor sentimental impact of Moody#39;s downgrade but the market may ignore it as rating agencies#39; reaction.
Sat, 09 Nov 2019 09:57:03 +0530


IRCTC IPO oversubscribed by 111 times on last day of bidding The shareholding of government in the railways#39; tourism and catering subsidiary will be reduced to 87.40 percent.
Thu, 03 Oct 2019 16:30:47 +0530

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