Monday, 9 January 2017

5 points on why Financial Planning is a must?

Why does one need Financial Planning? Many of us often ponder on its need in our lives. We can simply invest our money and take it out at the time of our need, then why Financial Planning? Here, are five points on why your money will serve you in a better manner if you have a Financial Plan and you are investing as per that.

1. You don’t want to retire with less money than you ought to have

Everybody wants to have fulfilled retirement days. Obviously, nobody wants to retire penniless. Retirement is the time to accomplish all those unfulfilled desires and dreams which you couldn’t fulfill because you were working. So, you need financial planning to know exactly how much of your savings will be enough? Otherwise, at the end you might realize that whatever you have saved is not enough to serve your needs.

2. You don’t want your kids to study on education loan

You don’t want your kid to blame you, if he gets selected in some good college and you didn’t have enough money to pay for his fee. For this, you should get you financial planning done to know how much should you save for your child’s graduation so that he can study without that tension of education loan looming over his head.

3. You want to know your actual insurance need

Sadly, insurance is sold as an investment and not as a risk cover which defies its true purpose. We all have car insurance, home insurance, then why not life and health insurance. Most of the times health cover provided by the employer is not enough but still we stick with the same and don’t bother to have personal health insurance. And same with life, it is important for us to understand that this cover is not for us, but for the family to survive if we don’t get to see another day. You need a financial plan to understand, how much cover you should have depending upon your lifestyle, income and expenses.

4. To know if you have the right asset allocation mix

Asset Allocation is one of the main reasons behind an alpha portfolio return. As simple as not putting all eggs in the same basket. Your portfolio should have proportionate ratio of all kinds of assets – Gold, equities, Debt, etc. This proportion should be as per your risk-taking ability and your attitude towards risk and should be monitored on timely basis.

5. You wish to have peace of mind

If you come to think of it, our whole life is surrounded with money and money matters. We need money for everything – for education, vacation, daily needs, and even retirement. And to think of it, how peaceful it would be for us if this money is already sorted out depending upon our needs. This is what financial planning does – it sorts out your money for you and enables you to live a peaceful life.

Charu Hastir, CFPCM is founder of Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit:

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