Important things in Financial Planning
Process
I have always recommended to all my
friends and clients that make a well financial plan and live a life filled with
enjoy and peace. Financial plan consist from some process like recognizing the
goal, make a income and expenditure statement, projection the needed amount of
money in the future for fulfill the particular goal, deploy the money according
to asset allocation and risk appetite with the investment timeframe etc.
During the process of financial
planning the investor and planner discuss about some numbers like a rate of return
of the different asset classes, expected inflation no. and monthly expenses
after retirement. It is very important to agree on a particular numbers after
discussing the plan. There are things like inflation and return of the assets
you and planner may be have different opinion. There are also things where you
or planner can predict no. very easy.
For example, if you discuss about
current assets, a financial planner can tell you that whether it is good or bad
based on their market knowledge and in majority cases there is no more room
left for debate or discussion for the asset quality. In other side, to decide whether
your monthly expenses Rs 50,000 or Rs 1 lakh per month, the investor can arrive
to the final no. and there or no more room left to argue for the planner.
To decide the inflation no. for next
20-25 years there may be different opinion of investors and planner. Even 1% -
2% different in the no. makes a big difference due to compound effect. It is
better to adopt conservative approach to decide the return of equity or debt
asset. After all it depends on your knowledge and experience of the market.
Financial plan review is also the important part of any financial plan. If any
changes happen in income, expenses, market or financial goal then there should
be a review of plan.
If you want more information
regarding investment or you have any other query about investment feel free to
ask us.
Warm regards,
Arvind Trivedi
Certified
Financial Planner
Regardless of the trading calls, Epic Research helps its clients to prepare an efficient financial plan to reduce the risk.
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