Financial planning is the process which provides you a framework for achieving your life goals in a systematic and planned way by avoiding shocks and surprises.
If our health is not good initially we take home remedies but if we do not recover then we consult to Health Doctor similarly if our wealth is not good we work hard to improve it but with unprofessional planning and if still it is not improving then you should work smart and consult to a Financial Doctor.
Health and Wealth both should be managed and planned properly below are some measures for proper Wealth Management
- Money Management
- Risk Management
- Planning
- Money management: Money management is not a rocket science and you even do not have to study a financial management for it, you only have to do is make estimates of your earning and allocate proper funds to your Saving and Expenses, generally people meet basic expenses and then they do have lot of money with them but does not have proper planning so those savings are converted in useless purchases or in depreciable products. Before making any expenses you should first ask yourself that Is it really necessary to sacrifice my future earning on this particular product? as instead of wasting money we can invest it in right product which can generate Income to us in future so by Investing you can choose security of life, Capital Appreciation or Estate Creation. Remember Todays Sacrifice is Tomorrow's Earning and to make Estate you should Invest on right product at right time.
- Risk Management: We generally think that nothing is going to happen to me so we do not cover risk of life, motor, health, home, shop etc. and if any uncertainty happens then we or our family is left in Financial jeopardy and even if we think to take policy for life cover we end it up with some random ULIP Plan as with it Life Insurance and Investment are made in same policy but do you really know how much return you get in ULIP plans and how much is cover, their are several other better products in the Market like Term Insurance through which you get larger Life cover and with remaining premium amount you can make investment in SIP's or directly in Market even Index gives minimum 13% return YoY if we calculate it since its inception.
- Planning: Planning Includes several things like Retirement Planning because Planning for retirement has become all the more important today than it was a few decades ago. There are reasons behind that. Due to increased life expectancy, you are going to live longer than your previous generation. Owing to a sedentary lifestyle, you are more vulnerable to ailments like diabetes, hypertension and heart attacks. Healthcare costs are increasing with each passing year. Lastly, in absences of a social security net, you need to have your own funds to tackle all these issues. If we deal with proper Retirement Planning we do not have to beg for even single penny to anybody and that can be planned if even we do Tax Planning because govt provides several tax benefits in financial planning like deduction u/s 80 etc. and we should even do our Estate Planning everybody have a plan to run an empire or make a house or open any restro etc. if we do Estate planning and work according to that I am sure their is nothing in this world that we cannot achieve.
We should even do our Portfolio Management and manage our debt wisely and if you are not able to do so then you can consult to Financial Consultant. A Financial Consultant have same importance to our life which we have of Family Health Doctor. So you should have a Health and a Wealth doctor both.
Like many others, you might be thinking that it’s too early to start planning now. In this way, your planning may get postponed forever. In fact, What you don’t know is that the earlier you start, the richer you retire. It happens due to the “magic of compounding”