Financial Planning: Road map to your financial future
Financial Planning can be described as “Long Term Process of Wisely Managing Your Finances so that you can achieve your Financial Goals & Dreams”. Today it is the need of the hour that one should make a financial plan as household, education and other personal expenses are going up every year. We also don’t know the impact of inflation in the longer run on our investment. Further loans and credit cards have become the part of life as they are easily available. We never calculate the impact of interest which takes away major part of our income. Financial Planning brings discipline in our saving and expenses. It helps us to set realistic goals and also priorities the goals. We can easily reach to our destination safely and timely if we set some basic rules for investment and act accordingly. Most of us are not aware of priorities in our life. We all Invest but without understanding our financial goals, risk involved and time horizon. Life Insurance, Health Insurance and Disability Insurance are also important in our life. Living a short life is always a major problem for the family but nowadays living long is also becoming more and more problematic. The average life of an Indian is 67 years at present and is increasing year on year because of the advancement of science and technology. Retirement planning and estate planning will also form a part of financial planning which is also not being not planned. Less than 1% prepare their WILL and this leads to litigations for years. We have to think very seriously about all these aspects in our life if we want to live happily.
Most of the people feel that they do not need financial planning as they are saving enough and also investing the surplus available, for which they get free advice from financial advisors. But, remember, there is another side of every investment which a common man does not understand i.e. risk involved in each instrument and impact of inflation and tax liability. Most of the sales happen without understanding the future needs of the Client. No product is good or bad but what is more important is that it should match with our financial expectations. Financial Planning is the process where product comes after the need analysis. This is the recent trend in India, where in a financial planner charges fees for making the financial plan and does not push the product to earn the higher commission.
Financial planners offer unbiased fee based advice which really can help one to achieve financial goals. A CERTIFIED FINANCIAL PLANNERCM is “An individual who is qualified and certified to give unbiased financial planning advice, free of conflict of interest. They take care of all finance related matters just the way a doctor takes care of all health related matters. They look at all realistic financial goals, review current insurance and investments and then give road map to achieve financial goals. They make written financial plans with future recommendations in the best interest of the client. They educate their clients and update them with recent changes in the tax and other investment laws. They follow a set of ground rules of ethical standards and are governed by a neutral body – Financial Planning Standards Boards India (FPSB India). It is also a mandatory requirement to have ‘Continuous Education’ and to be updated with the changes of the finance industry throughout the lifetime of practice as a Certified Financial Planner. Financial Planning not only helps you in achieving your dreams but also gives peace of mind.
Pankaaj Maalde is a CFPCM , Head – Financial Planning at Apna Paisa. He can be reached at email@example.com
The author is a Certified Financial Planner by profession. He currently works as Head - Financial Planning at www.apnapaisa.com and makes Comprehensive Financial Plans for Clients. He is IRDA and AMFI Certified and has over 11 years of experience in the field of Financial Services with special expertise in Life Insurance and Mutual Fund products.
The author can be contacted at firstname.lastname@example.org.
Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. The author does not accept any liability whatsoever arising from the use of any of the above contents.
- Festive season and air travel - Make the best of it
- All about everyday banking charges
- What vacation planning teaches us about managing money
- Ten financial commandments for young professionals
- Discounts are passé: E-tailers use technology to good effect
Have a question?
Also On IndiaNotes.Com
- Weekly momentum stock pick: Buy GHCL above Rs84.50
- Weekly momentum stock pick: Buy Mphasis between CMP & Rs405