Each one of us aspires to walk on the road of financial freedom. To reach there, it is of utmost importance that you plan your finances well through prudent financial planning. The essence of financial planning is to help you achieve your financial goals and in turn financial freedom.
As the concept of financial planning gathers momentum in India, here are a few answers to some of the most frequently asked queries.
What does Financial Planning mean
Financial planning comprises laying down your income, expenses, assets & liability and match with your financial goals. Making a financial plan helps you provide a clear direction on your finances. It goes through a process of articulating your goals, analyzing and evaluating your financial status and developing financial planning recommendations. It helps you understand your overall financial picture, offers solutions and most importantly gives a peace of mind.
Is Financial Planning really important
Financial Planning is as important as the goals themselves. Goals like secured retirement, a self owned house, ability to finance good education for children and helping children settle, are the most important life goals. Unfortunately “planning” as an activity doesn’t come naturally to all of us. In a way planning forces us to think about uncertain events and challenges hope. This is a significant barrier for us to start to plan despite us knowing that planning for an event or a goal significantly improves the odds to achieve it.
Can I make the plan myself without any help
It is possible to make a plan yourself….actually we all make a mental plan for all our important goals. However an expert or an advisor can assist in making the plan robust and reliable. Making a plan requires two skills…first understanding the aspirations of the client and converting them into specific goals. The second is the technical part of converting the goals into specific action points to do with the way and amount you invest. It is therefore recommended to choose an expert advisor and work with him or her to make a financial plan. It will cost you to hire a professional financial planner, but it is well worth it.
What can I expect from a plan
An ideal Financial Plan (the report) should give you your current investments and savings, evaluate your asset allocation with respect to your investment objectives and most importantly give specific actions that you need to take with respect to modifying your existing asset allocation and the investments that you need to make in future. You can also expect a cash flow statement which gives the expected cash inflows and outflows along with an insurance plan.
Does the plan assure a secure financial future
Financial Planning can significantly improve the odds of you reaching your goals. Ofcourse, just having a financial plan in hand is not good enough. The success of the plan depends on the rigor of implementation, though external events can have an impact too. For example inflation, interest rates and other macro economic factors can impact the basic assumptions. It is therefore important to review the plan regularly (at least once in a year) and also after any major life events.
At Vasupradah, our financial planning is based well researched methods that puts the plan to the scrutiny of various market scenarios. That way we ensure that you are well prepared for even adverse market conditions.
Schedule an appointment to know more