Why Financial Planning
Assessing current wealth
This can be done by deducting all liabilities and debts from the total investment and Assets
Identifying Goal
- Make a list of Goals and Segregate
- Short term (Like Marriage, Buying a car)
- Midterms (Going for Vacation)
- Long terms (buying house, Child education, Child Marriage, Retirement)
- Identifying the Fund you need and when
- Once you identify the Goal arrive at the fund you need factor the inflation
Risk taking ability
Assess your Risk taking ability – This depends on your liability, Age, income, Dependents, work
Where to invest
Depending on the Risk ability choose your Asset class (Debt, Equity, Real estate, Gold etc.)
Review
Once you plan and execute, it is very important to periodically review and rebalancing the portfolio and assess how far you reached in each goal.
The most important thing in financial planning is discipline and biggest enemy is Greed