WHAT IS FINANCIAL PLANNING & IT’S IMPORTANCE
Financial planning examines your goals and helps you prioritize, save and invest for them. At Money Multiplier, we strive to help you make a financial plan and investment decisions with confidence.
If you are from the school who believe financial planning is something only the very rich can afford, let me tell you, that’s simply a myth and nothing much.
The Goal of Financial Planning
Financial planning creates an ongoing process that will reduce your stress about money, support your current needs, and build a nest egg for your retirement.
With Money Multiplier, you’ll be pushed to answer questions about your income, spending, debts, and financial goals. We will help you to determine how much money you’ll need to accomplish those financial goals. We then guide you through the steps you need to take to get there. We, at Money Multiplier, also help you to choose investments and manage your investments for you.
Financial planning with Money Multiplier ensures you’re not just working for your money, but that your money is also working for you.
HERE’S A FOUR STEP GUIDE TO FINANCIAL PLANNING
Identify your financial goals: Think broadly about the important junctions of your life and how much corpus you need to achieve them. Do you want to buy your dream home? Do you want to save for your child’s higher education? What age would you like to retire? What kind of corpus are you going to need? Only when you identify it, you will be able to plan for it.
Amass your financial data: Identify your net worth, i.e. the value of your cash, investments and other assets against your debts. Identify how much cash comes in and goes out. Your income and your expenses make a crucial part of your financial plan.
Contrast your goals with your financial data – your income, your expenses and your net worth. This is nothing but a process to map how to get from where you are today to where you want to be.
Build and follow a budget, that’s really a must and inescapable.
Develop immediate, medium-term and long-term plans: Life stages will your path forward – If you’re nearing retirement, you might want to think about when you want to retire, and how to make the money last throughout. If you’re a newlywed, you need to start doing something now about buying your dream home or a dream car, or your child’s education. Define your goals, and develop your financial goals. Set realistic and practical goals. Keep a check on them month on month.
Monitor the life events and rebalance your investment portfolio: Financial planning or investment portfolio isn’t a static process. It needs continuous improvements and adjustments, depending on your progress and portfolio performance. Often, life intervenes like preparation for marriage, the birth of a baby, or emergency health situations calls for a financial plan update. Hence, it is very crucial that you keep a constant check on your investment portfolio.
Deepak Dhabalia
Wealth Coach
