Ravi had, he smugly decided, made a stellar hotel choice. Located right in the heart of the city, it was clean, well-priced, and featured comfortable beds within a beautifully restored vintage building. He’d even secured a room with a great view. The only tiny detail he’d overlooked was the absence of an elevator to his third-floor. Still, he thought, virtually patting himself on the back, a great find!
Then, the clock struck eleven.
A sudden, aggressive thumping from the floor above jolted the family awake. Ravi, annoyed, went to investigate. The truth was immediately clear: the entire floor above their room was a vibrant nightclub, separated from them by what felt like a single, porous sheet of plaster. He’d prided himself on his meticulous planning, but in his haste, he had completely missed the slew of review comments that screamed of nothing but sleepless nights. He sighed. Perhaps planning for the perfect holiday wasn’t as easy as he had thought.
Planning- The hard work behind
Planning doesn’t come naturally to all of us. Planning is tough. It is the dull work that precedes the excitement of any real event, and is almost forgotten to be credited at the end of it. Who remembers giving credit to checking hotel reviews, when the holiday is over!
But planning is what differentiates pure luck from well-earned luck. It is a guide, a well-wisher, in the background, who ensures that the adventure in your journey is not beyond what you expected or prepared for.
Financial Planning- A more serious matter than a hotel booking:
A Financial Plan covers a more serious journey. It creates a structured way to invest your money. It removes any unnecessary adventure in your financial journey. It is the hard work that is put in behind that ensures your financial well-being. It should not be ignored.
Our goals can include, planning for a good retired life, being able to send kids to the best colleges, starting a business or it can just be being well prepared for any uncertainties that life or job can throw. A financial plan revolves around your life goals. The goals need to be funded from your savings and investment in a way that you have enough or more funds when you need.
Today almost no employers provide pensions to their employees. Also as families have moved from a joint structure to a nuclear structure, the financial support has also moved away. Financial independence at the time of retirement should be the top priority. As per the IRIS 5 survey by Axis Max Life insurance, while more Indians are starting to plan early only 37% believe their savings will last beyond a decade after they stop working. The report notes that 7 out of 10 people underestimate how much they need for a comfortable retirement.
Avoiding costly mistakes
In a world full of investment products, the plan helps choose the right asset classes, right allocations and products to invest in. Effectively, the plan eliminates possible mistakes of choosing wrong investments that may prove costly at a later day.
Every plan is unique to the needs of the investor. It cannot follow a cookie cutter approach, it needs to be customized.
Process of creating a plan:
A plan is executed in 4 stages.
- Data Collection: In this stage, the planner collects data regarding your present financial situation, your current investments, savings, your risk preferences and details of your life goals. This helps form your investment objectives.
- Plan Creation: This is the stage where the data is crunched. The planner creates a plan that gives an assessment of the current investments, the target asset allocation, goal status and a recommendation on the investment options.
- Refinement and Implementation: It may take a few rounds of discussion before the plan is final. The implementation can be done with the help of an advisor or independently.
- Review: The plan should be reviewed periodically, once in six months if not quarterly. This ensures that both the planner and clients review the obligations and make changes if required.
Vasupradah- Adding rigor to your plan
At Vasupradah, we move beyond generic advice. We partner with our clients to create a customized and detailed financial plan. We thoroughly stress-test your plan against over 2500 simulations under various market conditions and worst-case scenarios to ensure that risks are anticipated and mitigated. And while you plan your next holiday with more rigor, partner with us to assist with a resilient financial plan.