We often heard of terms similar to financial planning, investment management, personal finance, retirement planning and the likes over the past several years. From blogs, newspapers, TV channels, magazines and just about every people is talking about the significance of proper financial planning. With all these things said, what is financial planning and why it is extremely important?
Meeting your goals in life via proper management of your money is the simplest definition for financial planning. The process of planning your finances should help you answer questions like your current personal balance sheet, where you are today, where you want to be tomorrow, finances linked to your goals and to what you have to do in order to reach it.
As a matter of fact, it is a lot more complicated than what you thought as the entire process involves gathering relevant financial info, setting goals in life such as buying a house, buying a car, children’s education, examining your current financial status and even coming up with a plan or strategy to how you can meet these goals given your present situation as well as future plans. There are a number of factors that should be considered when developing a financial plan such as hiring a financial planner, current financial status of the client, financial goals, insurance requirement, investment instruments, outstanding loans, inflation, retirement corpus, tax liability, risk profile and so on.
Financial planning provides a method to properly organize your financial future which gives you the chance to plan for unexpected events in life. It will empower you to become independent and to deal with unforeseen events in life by organizing your finances with the help of a professional financial advisor. For all those who wanted to accumulate wealth and manage financial … Read More ...