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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MFs pump over Rs 11,600-cr in equities in September; FPIs in sell-off mode The sell-off by foreign portfolio investors (FPIs) from the Indian equity markets has provided an opportunity to mutual fund managers, experts believe.
Wed, 10 Oct 2018 14:59:04 +0530


Chandan Taparia The Nifty IT index managed to surpass its 50 DEMA but remains near to its hurdle zone, says Chandan Taparia of Motilal Oswal Financial Services
Sun, 16 Dec 2018 10:14:37 +0530


Uttaresh Venkateshwaran LTCG, PNB scam, US-China trade war and MF reclassification are among the events that impacted the market this year.
Sat, 15 Dec 2018 11:18:36 +0530


Siddharth Sedani It is important to have a stable government at the Centre which will be able to implement the much-needed reforms for the Indian economy to keep growing at fast pace
Fri, 14 Dec 2018 08:47:15 +0530


Upbeat on consumption stocks, corporate banks; cautious on NBFCs: Enam Holdings Enam Holdings#39; Sridhar Sivaram said they are long on financials because there is lot of room for monetary easing.
Thu, 13 Dec 2018 13:17:45 +0530


Morgan Stanley sees Sensex rising 20% in 2019; bets on these 8 growth stocks Ridham Desai Sheela Rathi expect FPI flows to improve in 2019 after they turned net sellers in 2018
Thu, 13 Dec 2018 10:09:04 +0530


No issues with liquidity; mutual funds thriving now: IDFC MF The market is expecting easier fiscal and pro-growth policy from the new RBI governor Shaktikanta Das, said UBS Securities#39; Tanvee Gupta Jain.
Wed, 12 Dec 2018 14:00:10 +0530


Investors#39; mood towards emerging markets still grim, negative: Deutsche Bank Significant upside in the Indian market will be limited due to the political risks related to the upcoming Lok Sabha elections,
Wed, 12 Dec 2018 12:48:48 +0530


Invest in index funds, avoid thematic funds amid volatility: experts Kalpen Parekh of DSP MF advised investing in index funds provide better returns
Tue, 11 Dec 2018 16:09:42 +0530


Here’s what to expect from the markets in 2019 NULL
Tue, 11 Dec 2018 15:59:19 +0530


State election results out of the way: 10 stocks that could give 18-50% returns in a year Largecap and quality midcaps are a better bet at current levels. In terms of sectors, investors can look at banking, insurance, AMC companies, IT and retail-oriented stocks
Tue, 11 Dec 2018 13:33:45 +0530


Market to remain choppy till final results are out: Experts Siddhartha Sanyal, Chief India Economist, Barclays, said after today#39;s results, the market would focus on the upcoming Lok Sabha polls.
Tue, 11 Dec 2018 13:24:35 +0530


Raamdeo Agrawal Raamdeo said the market corrected and a lot of negative in local or global is already priced in
Tue, 11 Dec 2018 13:12:43 +0530


Nilesh Shah He believes the market looks better as long as oil is softer, interest rate is softer which will support corporate earnings and economy
Tue, 11 Dec 2018 11:49:57 +0530


Market waiting to see who govt picks as Urjit Patel#39;s replacement: JPMorgan #39;Urjit’s appointment was seen as a continuation of Raghuram Rajan’s policies and we saw risk premium getting contained,#39; said JPMorgan#39;s Jahangir Aziz.
Tue, 11 Dec 2018 10:58:42 +0530


Udayan Mukherjee Next couple of days will be dominated by the news of RBI and elections results, followed by focus on global setup, said Udayan Mukherjee
Tue, 11 Dec 2018 10:47:29 +0530


Neogen Chemicals files IPO papers with Sebi The initial share sale comprises fresh issuance of shares aggregating up to Rs 70 crore and an offer for sale of up to Rs 29 lakh by the company#39;s promoters, according to the draft red herring prospectus (DRHP) filed with Sebi.
Tue, 06 Nov 2018 18:26:14 +0530

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