Financial Planning is often rightly termed as blueprint or roadmap of your financial journey. This roadmap is essentially lifelong. At Hirannya FinPlan we understand and acknowledge this. Wholelife Financial Planning includes the following:
Sources of income and expense details are considered here. Not all incomes come at regular frequency or of same amount. Similarly not all expenses can have same frequency and certainty. Finding out near perfect monthly surplus amount and managing all expenses with dexterity is no doubt a daunting task. The more time spent here will ensure less time to spend in constructing financial plan.
Not every one of us handle investment documents with absolute precision. All your assets’ current valuation along with date of purchase, maturity date, rate of interest etc. are to be captured accurately. Such details and accuracy will only ensure that plan result comes out correctly. All liabilities’ details should also include amortisation schedule and up to date payments records. Knowing your networth is important to plan for the future.
This includes retirement planning, children’s education and marriage planning, buying home, vacation planning etc. There is a difference between your wishes and financial goals. A financial goal should be quantified along with definite time horizon. Identifying and quantifying of financial goals is surely the most important step in construction of a financial plan.
There are times and circumstances when we take loans. Sometimes that can also be a prudent financial decision. With changes in cash-flow and networth over time, loan repayment can also be a goal. When and how an outstanding loan can be repaid is a part of debt management exercises.
This includes analysis for requirement of life, health, critical illness, accidental protection and householder’s insurance. You should always be adequately insured. Choosing the right amount and type of cover is critically important. Getting over-insured or choosing wrong policies sometimes put undue pressure on your cash-flow. This should be avoided at any cost.
While in pursuit of creation of wealth we often forget the other side of it i.e. distribution of wealth. If you do not mention in detail in a prescribed format that who will get your wealth and what share of it – chances are that your family members will face legal troubles and inadvertent delays. In absence of a Will, prevailing Succession Act will be followed and your wishes will not be considered while distributing your wealth. Make sure, you make a Will. Let us remember the old saying – where there is a Will, there is a way.
Though paying the due tax is a regulatory requirement, the available deductions can also be used to save tax – thus create wealth over long term and achieve financial goals. Prudent tax planning ensures that you save optimum amount of tax and take benefit of all available deductions as per your financial standing.
Managing documents is no longer a ‘nice to have’ tag attached to it; instead it is now an absolute necessity. Keeping all documents under appropriate category head and chronologically sorting and indexing and finally archiving of the same will make your financial life easy, efficient and clutter free. Archiving digital copies of all important documents in a secured cloud server location is also a good idea.
When you set out in the journey of creating wealth, managing portfolio of different investment products takes the centre stage. During creation of the portfolio three things that we consider with topmost priority are – Your risk appetite, horizon of investments and Knowledge/comfort level that you have with different products like how they work. Except time horizon the other two things are interlinked and can be improved over time.
A financial plan will only work, if it is duly implemented and regularly reviewed. All micro and macro economic assumptions can be revised and corrected during review. Addition of new financial goals, or changes in an existing goal, can only be taken care during review. Following a financial plan to the core can rightly be compared with gyming and exercising. If you are not regular with your exercises, chances are less that you would be physically fit. If you want to be financially fit also, make sure your financial plan is regularly reviewed.