If you succeed in planning, you plan to succeed!

Yes, that holds for financial planning as well! Financial planning is gaining popularity in earning population across age groups. Individuals seek it with diverse objectives such as,

  • Investments of lump-sum received through inheritance or some windfall gains
  • Planning for retirement
  • Education and much more …

Time value of money forms the base of any financial planning and in simplest terms it is the reward received in future for consumption sacrificed today. The reward is further beefed up with premium for risk taken and duration of sacrifice. However, there are many moving parts when the journey is long and a lot of course corrections are required while following the map drawn out by your financial planner.

Your Needs and Requirements

A financial goal is defined by financial need in monetary terms required at a particular point in future is what an individual wishes to fulfill. It’s easier said than done.

Distinction between needs, wants, desires and dreams is vital in the goal-setting process.

For example,

  • Managing living expenses post-retirement is a NEED
  • That with maintaining present lifestyle becomes a WANT
  • Bequest of assets to children is a DESIRE and
  • Setting up a trust fund for provision of generations to come can be a DREAM

Capital Market Expectations

All the money saved and invested by individuals and institutions lands up in capital markets where those who want to consume it today (for future sacrifices to pay it back) borrow it. The terms of these investments vary depending on if it is equity, debt or any other structure. Every structure and source of capital comes with some risks.

Investors must consider risks associated with their investments, capability of those who manage their investments, global and domestic macro-economic scenarios and many more before taking a decision.

Finally, the decision regarding YOUR investments will depend on confluence of your requirements and capital market expectations. Outsourcing this task to an investment advisor will definitely result in a favorable cost-benefit. The clock is ticking and a lost opportunity due to self-management with a busy life is also a cost.

Wish you a Successful Planner!

Taking Care Of Your Money – The 3 Excuses

Never Taught In School

Understand some simple principles and practicing them will help us take charge of our financial fitness. It is helpful to spend an hour or two with a financial planner to understand these.
However, most people are hesitant to do this, and there are typically three excuses:

The 3 Excuses

1. My parents did fine without planning

All this idea of financial planning is okay. But, my parents did so well financially. They never needed any plan like this!

Things have changed. Life different for the earlier generations. The conveniences and luxuries did not exist – which today make demands on our money. We have shifted from joint family to nuclear family. While we will do everything to give the best future to our children, do we wish to depend on them for looking after us in our old age?
We want to become financially independent to live with a sense of self worth and self respect. That’s why, we need planning!

2. Where is the money to save and invest?

“I earn well, and so does my spouse. But we need to keep up our lifestyle. Everything’s getting so expensive”

It is not easy to save money. Just consider – We must give something to ourselves first! We are the two most important people in my life! Look at the equation below.

Income – Expenses = Savings

For financial success, change it to:

Income – Savings = Expenses

3. I am comfortable now, and this is how it is going to remain

But I am leading a comfortable life now. Retirement is far away. I will certainly save for retirement, not now, but later – when my income is higher

Sounds logical, right? But have we taken inflation into account? Do we want to go through life’s journey without a map? Can I have the freedom to retire early?

To take of these, meet a financial planner. Create your roadmap and,

  • Start Early
  • Save consistently
  • Invest wisely