FIVE-STEP APPROACH FOR STRATEGIC FINANCIAL PLANNING

Strategic investment planning still seems like an obscure concept to the investors and financial planners. Beyond the hype, however, strategic financial planning can bring real value to a person who takes the process seriously.

If you ask me, as a financial planner I would say, it’s hard to accomplish anything without a plan. A strategic investment plan looks at the financial circumstances, the financial goals, budget, and risk tolerance amongst the others. A strategic plan also helps you to determine where to divert your money and for what timeframe.

But, how should you approach strategic investment planning?

There are hundreds of financial planning and investment books dedicated to the topic. Developing a strategic financial plan might seem like an overwhelming process, but if you break it down, it’s easy to tackle.

Here’s our five-step approach to strategic financial planning –

#1 DETERMINE WHERE YOU ARE AND WHAT’S YOUR CURRENT FINANCIAL CIRCUMSTANCE

Sounds simple? Well, it’s harder than it looks. Some people see them finance as for how they WANT to see it, and not how it is in reality. Their desires and spending habits force them to go off the board and spend without realizing how they will repay. They thus, get entrapped in this same trap.

For an accurate picture of what your financial stand is, conduct a financial audit to get a clear understanding of your income and expenses, financial goals, and your budget.

#2 IDENTIFY WHAT ARE THE IMPORTANT JUNCTIONS OF YOUR LIFE

Focus on what you want to accomplish over time – your financial goals. This sets the direction of your finance or money over the long term and clearly defines your goals.

From this analysis, you will be able to determine your financial priorities.

#3 LET YOUR PURPOSE DECIDE THE CHOICE

Picking the right investment product out of a pool of investment product options in the market can be really tough. But if you decide your investment strategy, if you know the purpose of your investment, if you determine your financial goals, things get much simpler.

#4 BE DISCIPLINED

Being disciplined isn’t easy, be it life or investments. Despite best intentions and claims, many investors chase performance, they react emotionally to the market volatility and hence end up incurring far more trading costs than good discipline would suggest. Even when there is a long-term plan in place, if it’s not followed, the plan is just a distant dream.

#5 REVIEW. REVIEW. REVIEW. 

It’s not over yet. To ensure your personal financial investment plan performs as per your expectations, you must regularly review and refine your portfolio as necessary. We suggest at least once in six months.

A strategic investment plan is a great thing. It can help you to get returns on your small/big monthly investment amount that you never thought possible. If you haven’t already planned your investments, take the time to lay out a strategic investment plan now. It will help keep a track on your investment growth and focus on the future.

Choosing an investment strategy is about making informed decisions. Identifying the strategies that are best aligned with your financial goals is a smart way to keep your investment plan on track. You can also benefit from including different investment strategies and diversifying your portfolio.

The motive is to stay focused on your long-term financial goals and choosing your investment strategies accordingly.