Financial planning however is very important in every human being not only in creating wealth in the long run but also to protect himself/herself from many uncertain events. A proper planning enhances the ratio of reaching the goals in an easy manner. People have different goals and that includes children education, marriage, buying a new house, building a corpus for retirement, dream vacation etc.
Every individual, family and what not else even business people and companies want to be financially protected in all situations (good and bad). In order to be financially secure every person makes hundreds of decisions in his life, but all may not be a success due to lack of knowledge and subject awareness in making financial planning.
Financial planning is not the same for everyone and is based on their living conditions, the complete planning enriches the quality of life and gives strength and confidence by reducing insecurity feelings about your upcoming necessities and reserves. Financial planning ranges from simple to complex levels that impact our personal and financial statuses. Financial planning is a systematic approach which includes a step by step process.
Evaluation: It helps in the determination of the current financial situation.
- The advisor will take into consideration the client’s needs and wants and analyze the current financial condition based on income versus expenses and also with the client’s assets and liabilities.
- Evaluation of financial health is very important in formulating a plan and all the plans may not be fit for all the clients equally.
Setting up goals:
- After evaluating the client’s financial status, the advisor asks the client’s targets and goals which may include short term and long term goals.
- Goals should be realistic, measurable, achievable, time-based and specific. The example is given: Child’s education, marriage, buying a new house and retirement
Develop a plan:
- After taking all points into consideration, the advisor will suggest some investment strategies and build financial planning.
- Investment strategies include traditional fixed deposits, post office savings, metals, land acquisition and modern platforms like the stock market, mutual fund.
- After explaining all suitable plans to clients, he picks a plan which affords him the best.
- Planning not only includes investments but also lifesaving mechanism (Life and Health insurance)
Assessing/Reviewing the plan:
- The advisor goes through the plan and does alteration if any required for betterment of the client.
- Plans are regularly monitored until the goals are reached.
Disclaimer: The investment advice which is given by advisors are completely legal and documented. The result of the plan may or may not succeed and changes with market conditions. It is completely based on past performance and expecting the same in future.