Author: hirannya

  • Education Planning

    Education Planning

    GIVE YOUR CHILD A PROMISING DREAM FUTURE:

    You as a parents dream of fulfilling all the requirements and drams of your kids. You want to give the best to your child. Best of education, best of toys, best of health, best of everything!. The only problem of these best things is that these have the best price tags too. These days Child education is one of the biggest goals of any parents because of the high cost of education and tough competition. It is very important to start saving for your child education. To plan your child’s education check out this ‘education planner’ which will give you an insight on how much you need to save today, to provide for your child’s education at a future date.Cost of education is increasing yearly than inflation. Now a day’s college education is an expensive – but not an impossible one. With the right strategies, you can go a long way to meeting this challenge whether your child is still in preschool or already in high school.

    Step No.1: Generally children’s goes to college for under graduation at the age of 19 yrs and post graduation from 22 yrs of age. You can fix your term depending on your child current age and when you want the funds. Now you know the years left for your child higher education..

    Step No.2: Every parent has different dreams when it comes to child education. The courses like MBBS, MD, MBA, ENGINGEERING, Technology courses are very expensive one. First assume your child is   going to join the college from today then in that case what is the cost of education in today’s value.

    Step No.3: Now you know the cost of education in today’s value. But remember the cost of education is going to increase year on year because of inflation. In that case when your child goes to college after some years then find the cost of education will be that time. This is the amount you actually need at that time.

    Step No. 4: Once you know the target cost of education then you can start preparing for that. Here you have to take an important step before investing either systematically every month or one time investment. You have to find out whether you can achieve your target with the expected rate of return after adjusting inflation. Everybody has a different investment knowledge and risk appetite. Based on these factors you can choose different investment products to achieve your goal. If you are not comfortable in taking risk then just avoid that investment. Having said that generally equity investments gives better return over long period say 10 yrs and more. You have to satisfy yourself with suitable returns which will be able to achieve your target amount. More importantly if you have more years for your child higher education then you can invest monthly which will reduce your monthly outflow significantly.

    Important Decision: Your dream of giving best possible education to your child will be in dream only unless you insure yourself. It is always advisable to take the term insurance plan equal to your target amount. This will take care of your child dream education in case unfortunately if you are not here. Now for more details if you want to start planning for your child dream education planning.

    Excel_Icon

  • How to save tax in F.Y. 2014-15?

    How to save tax in F.Y. 2014-15?

    That time of the year has come. You receive a reminder from your employer to furnish details of your tax saving investments. It comes with a deadline, e.g. you need to give the details maximum by 1st week of January or February. Then 3 things happen –

    1. You ask and take opinion of the most profound expert in this field – your colleague!
    2. You feel great if someone takes effort to come to your desk and helps you making the investment … even if it is not at all suitable for you!
    3. You forget all these as mandatory year-end tasks and carry on as if nothing happened!

    I recommend you to first take note of the following 3 things instead –

    1. Tax saving investments can be made… err sorry… can be planned at the start of the financialyear itself i.e. in the month of April and not when you are asked to furnish details.
    2. Know your tax liability first. And it is easy; you need not even consult a CA for the same. Numerous websites are there to help you, just Google. Or even a simpler way is there – visit our website www.hirannyafinplan.com and try ‘tax calculator’.
    3. Make plan to achieve all your financial goals – short term, medium term and long term. Take care of your contingency. Make sure you bought adequate term cover and health cover and renew the same without fail. If all these investments also allow you to claim tax benefit – fine! If not, then also follow the plan ditto and pay tax instead.

    You can save taxes under various sections – 80C to 80U. You can check the details of all these sections in our website very soon. Before that I would like to bring your attention in the following 3 sections – most discussed and popular –

    80C

    Limit raised this year up to Rs. 1,50,000. Tax exemption on the amount invested can be claimed if investment is done in any of the following – Life insurance premium paid (only if yearly premium is less than 10% of sum assured), ELSS Mutual Fund, Tax Saving FD of 5 years tenure, NSC. REMEMBER first to find out the total EPF contribution that you make in the whole year + term insurance renewal premium that you pay + PPF investment if you make any + principal component of all your home loan EMIs + tuition fees part of school fees paid on children’s education. If the total is equal to or more than Rs. 1,50,000 then you need not to make any investment under this section. If the total is less than Rs. 1,50,000 – you can make investment of differentiate amount under this section –provided it makes sense or in line with your planned investment.

    80D

    You should always have adequate health cover. Ideally it should be a family floater cover of amount 5 lakh or more depending on the city you live in or likely cost that you may incur in case of hospitalization. The premium that you pay for this cover could be less or more than Rs.15,000 (the maximum amount that can be claimed as tax benefit). Even if it is less, you should not feel bad as long as you have bought a good and adequate health cover. You can buy health insurance cover for your senior citizen parents also and claim tax benefit up to Rs. 20,000. Here again, the focus should be on right insurance product and adequate insurance cover, and not on tax saving.

    Section 24B

    Most of the young families today, have a home loan to pay. Govt. encourages you to buy home and hence doles out tax benefits. Whereas principal component of your home loan EMI qualifies for tax benefit u/s 80C, interest component qualifies for tax benefit u/s 24B. Here there could be two scenarios – either the home that you have bought is put on rent or you are staying there. If you are staying there, then you can claim tax benefit up to Rs. 2,00,000 of interest paid. For let out properties, there is no such limit.

    Hope the above guidelines will help you in making right decision at right time. If you have any queries whatsoever please ask. Do comment. We are all ears.

    icon

  • Retirement Planning

    Retirement Planning

    Nothing is permanent in this world. Everything that comes will definitely go including us. But we don’t know when. Apart from this everybody would like to live life peacefully as long as they live. You have to decide whether you want to depend on somebody or live on your own without compromising your life style throughout your life. That is why it is best to put our best efforts and save more for the future. The important thing you have to begin with is to have a retirement plan for you today.Retirement Plan is very important in our life. The earlier we construct the structures to attain a wonderful retirement the better for us. Saving for your retirement is one of the toughest and most vital things you will do in your working years. Because you have to save for your children’s college education, paying your home loan, children’s marriage, buying cars and all the other everyday costs.  Everyone has their own retirement dreams as well.The thumb rule is that you will need approximately 70% to 80% of your pre-retirement  income  to maintain your lifestyles in retirement. However, depending on your own situation and the type of retirement you hope to have, that number may be higher or lower.

    THERE ARE LOT OF FACTORS ONE SHOULD CONSIDER FOR RETIREMENT SAVINGS.

    • Retirement Age: This is the first factor you should consider at what age you expect to retire? In reality people say that they will work even after retirement from current job. Here you have to consider like health problem, job instability, or change of workplace etc. Assume that your retirement age is 60 then earlier you retire you need more money throughout your retirement life. It is best to prepare for unanticipated events that may force you for an early retirement.
       
    • Life Expectancy: Nobody knows the life expectancy. There are few factors which may give     you a hint. Your family history – like your parents and your relative’s current age or how long they lived. Common diseases in your family.  Your past and present health status etc. These are all the factors you have to consider when calculating your life expectancy. You will approx find the number of post retirement years you will spend.
       
    • Inflation: Inflation is one of the main factors while you save for your retirement. Just to save for retirement you start saving but forgot the impact of inflation then your savings will not sufficient. If you don’t account inflation while saving then inflation will reduce your value of your savings. So it is very important that your saving has to exceed inflation.
       
    • Your Lifestyle: Different lifestyles are being adopted by different people. Generally Lifestyles are usually simple for most the people. But it is very important that what type of retirement lifestyle you would like to enjoy. Like travel, or hobbies you would like to pursue etc. These are all questions can help you to decide your required corpus for your retirement. Many people tell that they would like to work part time after retirement. But the answer is practically not possible.
       
    • Health: Nowadays it is very important to consider the cost of health care. Health care costs are rising every year than inflation. People get health insurance cover from employers generally till retirement. Very few offers this after retirement. If you are not taking this in to account then it will eat your savings later. It is better advisable to buy long term health insurance for your better tomorrow.

     

  • What is Insurance ?

    What is Insurance ?

    Insurance enables those who suffer a loss or accident to be compensated for the effects of their misfortune. The payments come from a fund of money contributed by all the holders of individual insurance policies. In other words, individual risks are pooled and shared, with each policyholder making a contribution to the common fund.The contribution is known as the premium. Premiums are paid to insurers – these are institutions which accumulate the money into the fund from which claims are paid. The loss is in fact paid for by the policyholder making the claim and by all the other policyholders who have not suffered in the same way.

    Insurers are professional risk takers. They know the probability of different types of risk happening. They can calculate the premiums needed to create a fund large enough to cover likely loss payments. Clearly, only a proportion of policyholders will require compensation from the fund at any one time.

  • What is SIP ?

    What is SIP ?


    BENEFIT 1

    BECOME A DISCIPLINED INVESTOR

    Being disciplined – It’s the key to investing success. With Systematic Investment Plan you commit an amount of your choice (minimum of Rs. 1000 and in multiples of Rs. 100 thereof*) to be invested every month in one of our schemes.Think of each SIP payment as laying a brick. One by one, you’ll see them transform into a building. You’ll see your investments accrue month after month. It’s as simple as giving at least 6 postdated monthly cheques to us for a fixed amount in a scheme of your choice. It’s the perfect solution for irregular investors.*Minimum amounts may differ for each Scheme. Please refer to SIP Enrolment Form for details.

     

    BENEFIT 2

    REACH YOUR FINANCIAL GOAL

    Imagine you want to buy a car a year from now, but you don’t know where the down-payment will come from. HDFC MF SIP is a perfect tool for people who have a specific, future financial requirement. By investing an amount of your choice every month, you can plan for and meet financial goals, like funds for a child’s education, a marriage in the family or a comfortable postretirement life. The table below illustrates how a little every month can go a long way.

    CREATING WEALTH THROUGH MUTUAL FUNDS

    What is wealth creation? In the simplest sense – a desire to be rich, a desire to have control over the aspects that effect our financial life, a desire to command respect with the control, our money path and having more than sufficient funds to cater all are needs in future. Through mutual funds we can create wealth and also forgo the market risk factor by a technique called averaging which can be achieved through Systematic Investment plan (SIP) and Systematic Transfer Plan (STP).

  • This umbrella is for all season

    This umbrella is for all season

    Wherever you are, you surely experience monsoon at some time or otherin the year. During monsoon we never forget to carry an umbrella whenever we go out somewhere (We may forget to bring it back thoughJ). The good old umbrella will protect us from untimely showers, will keep us neat enough to carry on our tasks, will help us to keep promises that we have made – even when mother-nature tries to play spoilsport.

    Similarly we need to carry an umbrella throughout our lifetime to protect us and our families,financially from unpredictable events and mishaps. This umbrella will also help us to keep our promises that we all make to our family members (often silent but bold enough). Our life can remain on track, even when luck is not in our side – thanks to this umbrella!

    Bitter Truths:

    1. Man is mortal. Yes, we will die one day. When, nobody knows. An untimely death can leave the family in lurch.
    2. Life is unpredictable. We may face an accident – minor or major – anytime, anywhere. Apart from physical pain, financially also it hurts.
    3. We may get diagnose with some critical illness at some point in our life. We may still survive, but there could be long term treatment. Thus, it can create a big hole in our pockets.
    4. We all know the virtue of spiritualism. But can we live the life of a saint? No. Hence we often find ourselves surrounded by expensive goods, gadgets, artifacts and jewelry. An act of robbery or an electric short circuit can then suddenly take us to Stone Age. So all our belongings as well as our “home, sweet home” are under risk –whether man-made events or natural calamities (earthquake, flood etc.).
    5. We may lose jobs. Pink slip, pay cut, trimming workforce – these words are not from Mars!

    Better Solutions:

    1. If you are married or if someone is/are financially dependent on you, consider taking life insurance – immediately. Remember it should be pure term policy only – online or offline, whatever you are comfortable with.
    2. Taking a standalone health insurance policy (popularly known as mediclaim) over and above the one which is provided by your employer is always a wise thing to do.
    3. While taking a pure term policy you should also opt for a ‘critical illness’ rider. This will come cheap. You may even consider taking a separate critical illness insurance policy altogether.
    4. Home, in most cases the biggest investment we make in our lifetime or the most critical asset we ever possess. A home insurance is thus necessary but often sidelined by most of us. A comprehensive home insurance policy canalso take care of its belongings.
    5. Contingency or an emergency fund should always be there. Take no chance here. This will always come handy when unpredictability strikes our life – whether it is losing our job or meeting an accident or anything you cannot think of now.

    Must not forget:

    1. The life insurance cover should take into account your family’s lifestyle expenses, outstanding liabilities, priority financial goals of your family members, without fail.
    2. While taking a mediclaim, remember, that your lifestyle, your location and standards of nearby hospitals / nursing homes should also matter in choosing the cover amount as well as the service provider.
    3. Before applying for a home insurance cover first checkout with your society members whether a full building coverage is already taken or not; also check your loan papers to find out whether you yourself had bought one while taking the home loan.
    4. Your contingency fund should take care of your 6 months’ expenses at least, including EMI and premium outgo. Also make provision there for emergency medical expenses. Remember, your emergency fund should always enjoy maximum liquidity, so that you can access it even in midnight.

    So, you see, whether it is raining or not, this umbrella is always useful and critical. Make sure – your umbrella is big enough to not land you in any awkward situation.

  • You also have a stake in the market, do you know that ?

    You also have a stake in the market, do you know that ?

    Yesterday, I met a friend in my office. And my friend’s friend was also there with us. While we were discussing about our profession, challenges and opportunities; he suddenly asked – So you people deal in finance, right? You then must have invested heavily in the stock market also? I replied – No, not exactly … Before I could say anything further, he quipped – Good, you should not. Because stock market is risky and nothing but a gamblers’ den. I replied – that see, driving is also risky. It is even riskier for my 5 year old daughter and certainly not so for me as I know how to drive. He did not argue further, but from his facial expression I made out that he was not convinced.

    I was thinking about this futile conversation later also. Then I made a list of people whom I know very well and who have never invested in the stock market. When the list was ready I found a striking similarity there, that they have all actually invested in the market – mostly without even realizing that!

    How?

    Suppose your name also feature in that list. Here is a brief background of yours – You work in a reputed MNC at a senior position. You have been working in this organization for last 5 years. Four times in last five years you received a hefty hike in your salary. Before this you worked with a leading Indian conglomerate for 7 years.

    Before going further, tell me now – Do youagree that you have already invested in stock of your current organization?

    While changing job 5 years back you had choices before you – which company’s offer letter to accept or which interview to go for at the first place. Out of many job offers pouring in your inbox you decided to choose only a few among them. You needed a job then, but you also had your terms and conditions well set out. These are as follows:

    • Company’s goodwill
    • It being employee-friendly
    • Good management
    • Long-term growth prospect
    • Incentives
    • Its position among the peer
    • How the company fared during last recession etc.

    Once all your terms and conditions were met you were ready to go. So almost all your efforts can be summarized as below:

    • You decided to join the current company finally and hence also committed to give the largest share of your day’s productive time to that company. Time is money. So this was a big investment of yours.
    • You did your due diligence well before investing err joining.
    • You checked your margin of safety before joining there.
    • You made sure that the company’s management run the company well and with values and principles.
    • You give a lot of importance to company’s profitability in future which is directly linked to your growth and prospect.
    • Still this decision of yours is not completely risk-free. Agree?

    If this is not stock investment – what else is? Want to see more similarities between choosing a job and investing in stock market? Here you go:

    • So even if an ABC Company with no credentials offers you a great package, in most probability you will decide not to join there. Your view here is surely long term.
    • Again when you search job you mention a few sectors only as your preferred ones. This means you will unlikely to venture into any sector where you do not have much knowledge. But over the years as your experience grows, you realize that you can do justice to many more sectors. So your circle of competence grows over time.
    • If this investment decision of yours is turned out to be really good, then you are expected to get good incentives, year-end bonus and pay hike. Are not these similar to rights issue, dividend, and bonus shares (not necessarily in the same order)? Did I forget to mention ESOP as another fall-out?
    • Your value of investment has also been appreciating in the process. Next time, may be after years, when you will look out for a new job after consistently giving good performance year after year in the current organization – other companies will definitely assign higher value to your candidature then. This is similar to your investment capital getting appreciated.
    • When your company manages to bag new orders, expands to newer and lucrative horizons, acquires a good company or get itself acquired by a bigger and better company – you feel good. Feel vindicated in your choice.

    This is what stock investment is all about. If you make informed choices and remain careful in handling your investments, you will get your effort’s worth. You will create wealth in long term. But you need to be as careful and serious as you are while looking for a job. If you are an entrepreneur or a businessman or a professional having your own practice, then the similarities are even more. There you know the things (checklist before investing in anything) from inside.

    There are more checklist involved in buying stocks, than what we have discussed above. There are dissimilarities as well. Like, while buying stocks you should always look for a good bargain i.e. buy the stock when it is available at a good price.

    Buying stock is like buying a business. How can you be casual then? Warren Buffettonce rightly said, “An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.”

  • Education is a 9 letter word

    Education is a 9 letter word

    You can do the planning for your child’s higher education all by yourself. Education is a 9 letter word and here is a 9 step guide for you to make sure that you miss nothing while planning for your child –

    • Set the target – Think first that the money is required now. If that is the case, then with what amount you would feel comfortable? Say, the amount is Rs. 10 lakhs i.e. the cost as of today.
    • Consider inflation – Butthe fact is that you will be requiring the money later, say after 10 years. Then the actual amount which you should have then would surely differ. Blame it on inflation. Again this inflation may not be the same as for other household items. Normally inflation of education cost is always higher. Let us assume it to be 10%. Using simple FV formula in Excel, now you can find out the actual amount which is to be targeted, say Rs. 25 lakhs.
    • Allocate assets – If you have already made certain investments keeping this goal in mind, allocate those assets to this goal. How to do that? Say, the asset which you have already made investments in, is Fixed Deposit of Rs. 5 lakhs. Now assume that this deposit is to be renewed for next 10 years till your child becomes 18. You also have to assume the net return (post tax) that can be earned from fixed deposit year on year. So now it can be found out that what amount will be contributed by this asset, say Rs. 10 lakhs.
    • Find the Deficit – After allocation of existing assets if there is still a deficit that has to be taken care of. In our above case, there is a deficit of Rs. 15 lakhs (25 – 10). So now you know the task in hand – to accumulate Rs. 15 lakhs in 10 years.
    • Know the Options – What are the options that you have now? Before coming to that, make sure that you have listed all your current assets and outstanding liabilities somewhere. Also list your income and expenses in details. Deficit can be met either by making lump sum investment or through regular monthly investment. Looking at your networth and surplus figures, you should take a call here.
    • Decide on Asset Class – When you know the deficit and the available time period to accumulate the target corpus, you can easily calculate the required return that your investment portfolio must generate. If it is anything equal to or more than 12% (post tax) return, then your investments have to be market linked – either in direct equities or in mutual or both. But ULIP (Unit Linked Insurance Plan) and Child Policies are strictly no no. If required return is between 8 to 12%, then real estate or high yield bond/debenture could be an option. But such asset class does not allow accumulation through regular monthly investments. If required return is less than 8%, fixed deposit and investment in similar fixed income instruments should be ok.
    • Finalize the Right Product – Now when you have already zeroed in on appropriate asset class, finding right product should not be a big problem. There are various websites which can help you to find out top performing mutual funds. But make sure that such list is based on long term (minimum 5 year) performance only. One mutual fund scheme should be ok here. Do not distribute your investments into too many schemes. If total required monthly investment is of significant amount, you can consider more schemes, but make sure that the underlying portfolios do not overlap each other. While finalizing fixed income instrument, credit rating and rate of interest should be looked into above anything else.
    • Monitor the Investments – Yes, monitoring the investments is necessary, but not too often. Quarterly taking a stock of all the investments in your portfolio should be fine. Even if some investments are giving sub-optimal returns, it does not mean that you come out of it. Give time to grow your investments. If less return is due to negative market sentiment or for adverse macroeconomic factors, you need not worry actually. If some investments are performing badly for a long stretch while its peers are performing well, you need to take a call then and rejig your portfolio.
    • Review the Strategy – Monitoring investments and reviewing strategy are not same. A strategy needs to be reviewed when you realize some of the assumptions gone wrong. It could be expected return from a particular asset class or could be inflation in general. Goal amount itself can change also depending on child’s knack and opportunities available. In such situations you need to recalculate the whole thing and make necessary changes.
  • How to keep track of your expenses

    How to keep track of your expenses

    While in the course of advising people in planning their finances, many a times I encountered doubts and concerns of investors as far as keeping track of their expenses is concerned. Their common feedbacks on this can be summed up in the following three points:

    • Where does the money go?
    • Planned expenses and actual expenses never match.
    • No trend or pattern can be found out the expenses happen every month.

    This is a fact and a known issue. Naturally there are recourses available also aplenty. There are apps, software, tools, calculators and so on. But still you fail, still you go out of budget every month, every year. Why? One reason could be as this is a very personal and unique area to address, there cannot be any panacea.Hence ‘one solution for all problems’ approach does not work here.

    How can this be addressed then? The answer is – expect the unexpected. Yes, while listing the expenses, we often assume ourselves as machine, devoid of emotion, impulsions and craziness. That is quite impractical and inhuman too. Let’s accept, at times, we all listen to our heart and do things that is devoid of any logic or pattern. But that’s not a mistake. Mistake lies in not accepting that. Actually that is what you are made of. That is YOU. Such crazy actions actually make you different from others. And you are different. So is me. So is he and she. So let’s keep a place for ourselves in our expense list to do crazy things. (Note: we do crazy things, but never go insane. You got it, right?)

    How our expenses look like? I know that is an impossible task, but still you may find some similarities in the below list. While preparing such list, mostly we put different expense heads as categories. Let’s call that bottom-up approach. Let’s try to put it differently now. You can call this top-down approach. Here you go –

    121-300x173

    So basically you have only four categories to look for:

    • Monthly expenses that are bound to happen and you know the accurate figure
    • Monthly expenses that are bound to happen and you can safely predict the amount though not accurate
    • Non-monthly expenses that are bound to happen – timings and amounts though can either be known already or can be predictable
    • Expenses which you are not quite sure of – neither timings, nor amount and sometimes not even categories

    So you have four categories to include all your expenses you can think of and not even think of. How to do that? Here is a sample (though actually your could be way different than mine) –

    Category 1:

    (Monthly expenses that are bound to happen and you know the accurate figure)

    Rent, EMI, SIP, Building maintenance or society fee, Dish TV subscription, School fees
     

    Category 2:

    (Monthly expenses that are bound to happen and you can safely predict the amount though not accurate)

    Grocery, Milk, Electricity, Water, Mobile, Internet
     

    Category 3:

    (Non-monthly expenses that are bound to happen – timings and amounts though can either be known already or can be predictable)

    Insurance premiums, Annual maintenance, Fees for hiring services of a professional (CA, Financial Planner etc.), Tax outgo, Children’s admission expenses, Membership fees, Birthday and anniversary expenses
     

    Category 4:

    (Expenses which you are not quite sure of – neither timings, nor amount)

    Dresses and accessories, Repairs, Travelling, Furniture, Electronic gadgets, Medical expenses, Buying gifts for functions, Buying toys for your children, Dining out, Watching movies at multiplex, Buying books and CDs, Getting enrolled for courses

    As you have seen by now, you actually cannot do much, except setting money aside, for expenses coming under first three categories. So, watch out, monitor and make provisions for Category 4. That is where the actions happen. And that is what actually makes the difference. As I have said before, yes we do crazy things there but we never go insane. So if you give little more time here, you can surely find out the maximum limits you can go upto for each mentioned expense head in Category 4. Once that is done you can start creating a fund for this category. Then you are most unlikely to go out of budget, ever.
     

    How can you implement this strategy?

    Different scenarios are possible here.

    Scenario 1: Assuming you and your wife are having two sb a/c each

    Keep funds for each category of expenses in different a/c. You would not be required to carry ATM card for Category 1 and Category 3 type of expenses anyway.

    Scenario 2: Assuming you are having two sb a/c and your wife is having one.

    In one of your accounts keep fund for Category 1 and Category 3 type of expenses together. In other account keep fund for Category 2 type of expenses. And in your wife a/c keep fund for Category 4 type of expenses.

    And so on.
     

    What is your contingency fund or emergency fund?

    If we assume here, that we are keeping aside 6 months of our unavoidable expenses in contingency fund, then –

    Your contingency or emergency fund = (Category 1 + Category 2) * 6 + Category 3

    If you have already made provision for Category 3 type of expenses in one separate a/c, then you can keep your contingency fund i.e. (Category 1 + Category 2) * 6 in one liquid fund or in a flexi-fixed deposit.

  • Make sure that you get 10 out of 10 here!

    Make sure that you get 10 out of 10 here!

    You know that financial planning is important and that is you are opting for it or you have already opted for one. Here is 10 point checklist to make sure that you get it all from your financial planner and miss nothing –

    • Financial Planning is having a bird’s eye viewof all your financial matters
    • Financial Planning is joining bits and pieces to make you see the big picture
    • Financial Planning is a roadmap / blueprint / game-plan to achieve financial freedom
    • Financial Planning is financial fitness
    • Financial Planning is a commitment to not make any financial mistake ever
    • Financial Planning is optimization of resources
    • Financial Planning is securing your present and future
    • Financial Planning is a coin having two sides – strategy and action
    • Financial Planning is planning life and it also addresses concerns beyond money
    • Financial Planning is making life simple and clutter-free

    You know your finances well. You are a disciplined saver and investor. You know your income and expenses. You know your assets and liabilities. You know your insurances. You are taking care to keep enough funds ready for children’s higher education and marriage. You are saving regularly through provident funds and other investments to make sure that your post-retirement life becomes smooth and tension free. But can you see that ‘big picture’, that snapshot which covers everything at one go? Which gives you a clear picture of your present and future? That experience is like having a bird’s eye view. Financial Planning should make you feel that.

    You have a target set. You have some limited overs to play. And you are playing to win the game. So you know now whether you can afford to play slow or not. You know now the importance of having a game plan. You have certain financial goals set – 10 lakhs for child’s higher education, 10 lakhs for child’s marriage, 4 crores for retirement. In next 8 years child will be passing 10+2. In next 16 years child would be of 26 years and ready for marriage. In next 20 years you will be retiring. To achieve all these you have to have a game-plan ready. Financial Plan is equivalent of a roadmap which you require before you set off a journey; is equivalent of a blueprint which you require to construct something big; is equivalent of a game-plan which you should look for if you are here to win the game.

    Financial Planning makes sure that you are making optimum usage of all your resources. There should not be any place for regret. It gives you the best fit solution. It starts with safety and security. First you secure your family’s present and future, next move forward to achieve goals. Financial Planning focuses a lot on setting strategies right. But if strategies are not backed by actions, then everything falls flat. It is a long term (financial) fitness program. Stay tuned. Stay focused. Stay fit.

    Money is important. So is relationship. So are your hobbies and passions. So is your health. So is your contribution to society. The list goes on. If you overlook any of these, real wealth can never be created. Among all asset classes, the most important asset is surely YOU. You need to invest in yourself regularly.

    Financial Planning should make your life simple and secure and make you happy.Period.