What is Financial Planning?
All of us have some dreams in life – be it buying a dream home, a car, children’s education, their marriage, travelling abroad for leisure, retirement, among st host of others. In parlance to personal finance, all these are financial goals; because after all, along with emotions they carry a monetary value.
You see, for your dreams to convert into reality there’s no other alternative to effective planning.
Our experience narrates that many people often have infinite financial goals with limited income. They don’t know where to start from for achieving these goals and which path to follow. While being ambitious is good, it is vital that you know the path you’re travelling to, for you to reach the desired destination.
Must Read : Why Financial Planning is Necessary.
So, here comes financial planning which will help you to:
- Define and Prioritize your financial goals
- Analyze where do you stand currently with respect to your current financial situation; and
- Provide a clear road map of how to achieve your financial goals.
SOME MYTHS ABOUT FINANCIAL PLANNING
I am too young for Financial Planning:
You are never to early to adopt a good habit. Good habit in financial planning refers to saving, budgeting, setting your financial goals and Investing. Infact, starting investment earlier recurs you great benefits. You can incur the compounding on your investments as of long-term investment horizon.
Financial Planning is only for Rich People:
This is a senseless myth that most of the people are believing is “financial planning is for rich people.” No Financial planning is not specifically for the rich people but is for you to become rich. Its all for those individuals who have aspirations and fulfil them without any compromise.
Financial Plan is just another way to Sell me products:
Yes! You are right if you thing the same. Because all these years the investment agents may have been forcing you to buy their financial products in name of “financial planning.” But, this is the call where you should pick the right plan or the right advisor for you. Perfect Financial planning is not easy task it costs lot of effort and pain to design a financial plan and that’s the reason they charge professional fee.
Financial Planning is just about investments:
No, It is not just investing or tax plannig, but it is about reviewing your existing investment portfolio, planning regarding your contingency requirement, insurance requirement, ,Asset Allocation, financial goals and building an investment portfolio which suits your risk demand etc.,