- The Complete Picture
Financial Planning helps you compile a complete financial picture and determine your
objectives.
When a doctor is consulted, he usually begins by referring to a complete medical history. A Financial
Planner, also a general practitioner, similarly completes a comprehensive and confidential financial analysis. It helps you understand how each financial decision affects your life's goals.
- Analyzes every aspect of your current financial situation
Your financial situation has many aspects (assets, income, loans, insurance, taxes, business interests, wills, to name a few) which will benefit from the careful scrutiny of a trained professional who will analyze them in light of your objectives as well as the current legal, tax
and economic environments.
- Identify weaknesses and recommend improvements
The objective of Financial Planning is to help you make best use of every rupee by designing a strategy which will overcome any
weaknesses in the management of your affairs and
provide specific recommendations to help you achieve your financial objectives.
- Reduced Stress
The unknowns and fears cause stress. By prudent financial planning you know exactly what your money is doing. This knowledge and understanding helps you feel more secure and less stressed.
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Can
You Do Your Own Financial Planning?
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There are a number of books, magazines or software packages which can help you do your own financial planning. The internet offers a host of shareware software, which claim to do financial planning. But how good this software is can be determined only by trial and error.
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You should aim to do your own financial planning only if you have the time and the requisite knowledge to do so. If you are very keen to do-it-yourself, you can have a financial planner take a look at the final plan. He may be able to suggest improvements, point out grave mistakes or tell you that it is a good plan.
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How
To Make Financial Planning Work For You?
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Set
realistic goals.
Set realistic
goals. Set specific targets of what you want to achieve and when you want to achieve results. Be quantitative wherever possible. You may dream of your goals but be in touch with ground reality. Not all can be a Rockefeller.
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Understand Risk and Return.
Understand that there is no free lunch. Risk and return are interrelated. Set reasonable objectives. Do not expect high yield investments not to carry any additional risk, they usually do. Most people underestimate the stress of a high-risk plan on its way down. In most cases its better to be safe than sorry.
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Review your Plans.
Once the plan has been implemented, it requires a periodic review. This is imperative to adjust the plan to the changing situation in one's life, financial situation and income levels.
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Start Early in
Life.
There is a myth that financial planning is for the elderly. The earlier you start financial planning the better of you will be in achieving your life's goals. It's more advantageous to save small amounts of money at a younger age than to wait till one is much older to save large sums
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Execute the Plan on time.
Financial planning is a perishable commodity. What is available today may be gone tomorrow. Speed and timeliness of execution makes the difference between a millionaire and an average performer. If you have doubts about your ability to execute the plan in a timely manner request your financial planner to do it for you.
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