What is Financial Planning PDF  | Print |

Financial planning is a critical exercise in ensuring long-term financial security and peace of mind. A Sound financial plan is a route map to help you achieve your life’s financial goals and protect the uncertainties on your journey to those goals.


Can you do Financial Planning yourself ?                  

Of course you can…but just like you won’t do surgery on your own body or repair your car on your own, you need to come to an expert for financial planning. Otherwise, without the right financial skills and tools for financial planning, your finances can end up as a disaster.

 If you feel you can do financial planning on your own, you might want to answer the following questions:

           Is your family going to be financially secure, whatever happens to you?

           Will you have an income if you are struck with a major illness or disability?

           Are your finances tax efficient? Do you know how to legally save taxes?

           Are you confident that investments give you the best return in a rising or a falling stock market?

           Can you change the risk exposure of your financial plan as your realities change?

           Do you have enough money to pay for your son or daughter’s education?

           How about for their wedding?

           Do you wish to retire in the skyscrapers or next to the marina? Is this just a wish, or have you        enough money to turn this wish into reality?

           Does it take care of inflation? And how about the rising life expectancy?

           Are you planning to leave an estate for your heirs? And how much?

           Do you have a will? And is it updated and compliant with the law of the land?

           If you don’t have a Will, do you know what will happen to your hard earned assets upon your          death?

If you did not answer yes to all of the above, then you should feel uncomfortable. You must see a financial planning specialist who can make the right recommendations for you.

Five basic questions that you will answer during financial planning

1.Where are you today ?

2.Where do you want to get to ?

3.How far are you from there ?

4.How can you reach there ?

5.Will you be able to get there ?

During the financial planning process you define and analyze what your financial needs and goals are. Then, you quantify in money terms what resources you need to meet those goals, and quantify the time period during which you want to achieve these goals. After this,  you prioritise your goals on the basis of merit and necessity of these goals. Finally, you write an action plan on what you need to achieve with your plan in terms of what products to buy, what types of savings to make and what strategies to follow.


But, for the success of a financial plan, you also need to ensure that you review it on a periodic basis to have the answers for your changing circumstances and your investment strategies are up to date to tap the potential of realities of new world order.

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