Advantages of Financial Planning
One of the thumb rules of investments and financial planning is
Start Early. Drive Slowly. Reach Safely.
At the early stage of our earning life, we have few responsibilities; it is the time when we can save the most. Also, being young our risk tolerance is high, as we have time by our side. Gradually as our responsibilities increase, our spending and our cost of living increases as well.
The earlier you start planning your expenses and investments, the easier it is to reach your financial goals. For instance, let’s consider retirement planning. If you plan your retirement at the age of 60, you want a corpus of Rs.1 crore at age 60as per your current cost of living. You have 30 years for retirement. For which, you need to invest about Rs.7, 500/- per month at an assumed growth rate of 8%.
MENTIONED BELOW IS INVESTMENT RATIO CHART
|Sr. No.||PHASES OF LIFE||INVESTMENT RATIO|
|1.||Early earning age||80%|
|3.||After the Birth of 1st Child||40%|
|4.||After the Birth of 2nd Child||20%|
|5.||When your children are in school/college||10%|
|6.||After your children are stable in Career||80%|
ADVANTAGES OF HIRING A FINANCIAL PLANNER –
- A financial planner has is an expert with in-depth knowledge and years of experience of investment and finance domain. He spends his working hours studying, analyzing, and evaluating the market. Hence, he can offer you expert advice based on your financial goals, your risk tolerance capacity, and the time horizon. Also, based on the past performance and future potential, a financial planner can suggest you which funds to invest in for long-term and short-term.
- We can’t predict or foresee each and every eventuality in life, but experienced financial planner can help us plan for the foreseen and unforeseen eventualities of life. This helps you to be financially equipped and prepared for the future.
- Most of us are so very tied up with our daily chores like rearing up kids, job, managing family, etc. that we can spend hardly any time on personal financial planning or investments. Amidst all the daily chores, financial planning is often overlooked. It is not the case by having a financial planner with us. We have a dedicated professional, who is always planning our finances for our better future and this can help us achieve our financial goals with ease.
- A financial planner or a money multiplication advisor helps us segregate our money in smart investment tools life insurance, health insurance, property insurance and creating emergency reserve based on our risk tolerance, time horizon, investment capacity, financial goals and financial circumstances.
- A financial planner frequently study the market, our financial goals, and our financial circumstances, based on which the time and again suggest us whether we need to add or remove investment assets.
- A financial planner helps us accommodate and control the change in financial situation.
Money multiplication is usually a case of self-discipline. It may be hard, but having a thoughtful investment plan provides financial peace of mind and a source of funds if you need them.