Financial
planning is a long-term process of wisely
managing your finances so that you can achieve
your goals and dreams. These goals may include
- Buying a house
- Saving for your child's education
- Your daughter's marriage
- Buying a car
- Eventually planning for retirement
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| How
to Make Financial Planning Work for You? |
- Set
realistic goals - Set realistic goals.
Set specific targets of what you want
to achieve and when you want to achieve
results. Be quantitative wherever possible.
You may dream of your goals but be in
touch with ground reality. Not all can
be a Rockefeller.
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- Understand
Risk and Return - Understand that there is no free lunch.
Risk and return are interrelated. Set
reasonable objectives. Do not expect high
yield investments not to carry any additional
risk, they usually do. Most people underestimate
the stress of a high-risk plan on its
way down. In most cases its better to
be safe than sorry.
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- Review
your Plans - Once the
plan has been implemented, it requires
a periodic review. This is imperative
to adjust the plan to the changing situation
in one's life, financial situation and
income levels.
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- Start
Early in Life - There is a myth that financial planning
is for the elderly. The earlier you start
financial planning the better of you will
be in achieving your life's goals. It's
more advantageous to save small amounts
of money at a younger age than to wait
till one is much older to save large sums.
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- Execute
the Plan on time - Financial planning is a perishable commodity.
What is available today may be gone tomorrow.
Speed and timeliness of execution makes
the difference between a millionaire and
an average performer. If you have doubts
about your ability to execute the plan
in a timely.
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