Whenever you hear the word
financial planning, what comes to your mind?
Money and math are the two very
common concepts that most people will relate to the process of financial
management. But managing money involves a lot more.Traditionally financial
planning was all about securing one’s future, or saving for the
retirement, but let us now observe a different angle of managing finances. Let
us understand this new perspective in detail, supported with the help of the
following 7 observations.
1. A
Financial Plan is not just about your future, but about your present as well
Future is an illusion that does
not exist in certainty. As an investor, you design your present with a
financial plan. Most investors might think that financial planning will help
them secure their future, however in reality it is something that will help you
learn about playing fully in this very moment. Therefore, rather than worrying
all time about future security, look at what best you can do in present with
your financial resources.
2. A
long and lengthy financial plan document is just a myth
What is the financial plan meant
for? To make us learn how to get in control of our financial lives. Therefore,
lengthy plans will do nothing else than just confusing the clients. So, going
for tedious financial plans stuffed with complex calculations, heavy graphs and
pie charts will only lead to the increasing frustration of the investors.
Rather, why not consider getting
a financial plan that you as an investor can yourself hold and implement? This
may be like a one page document or summary, short and simple to understand. A
brief plan is more precise containing only that matter, which is significant
and useful to the clients. Such a plan will also make it easy to understand our
financial lives.
3. Look
for an agile financial plan
In financial planning, exchanging
ideas and advice is just the 20% of the work, rest 80% is about taking actions.
Investors trust a planning tool, only when it takes some action. After all,
what matters in the end is only those activities that produce result. Nothing
more than that.
4. Remember
that your financial plan is about nothing else, but YOU
What does an investor think of,
when looking for a financial advisor? To find a person who can advise for
fetching the maximal returns out of an investment. Always remember that
financial planning is not about calculations on products and returns. Rather,
it is solely about you. It is an opportunity to be completely truthful in terms
of money. This will help you get disciplined as an investor, and fix your
earlier mistakes.
5. Financial
Planning is not an exercise for selecting the ideal financial product
Wealth creation is all about
exploring with experimenting. Most investors are thus unable to build wealth as
they fail to understand this principle. A good and efficient planner will
always encourage and motivate their clients to try and explore new things, in a
way educating him in the financial journey. And, one’s financial journey
should be always about exploring opportunities in unknown territories.
6. Never
lay your focus solely on bringing certainty
Financial Planning is not about
to get certainty into your lives. It is about building your financial muscle
that helps you face all kinds of situations. Moreover, a financial plan brings
more completeness into financial life, and helps you have an external point of
view on the same. Many a times, you may observe many plans not turning out the
way they should have been. However, that does not mean you stop to plan at all.
Keep planning no matter what happens.
7. Be
committed to your financial plan
Your financial plan is definitely
only about setting your goal and finding a direction to achieve the goal.
Setting goals and getting a direction is a very simple task, but sticking to your
commitment will exhibit how serious you are towards attaining your goal.
Commitment will let you focus onto what is required to achieve your goals, as
well as not get distracted by anything else coming in the way.
Let us now conclude this
discussion with a belief that it was useful in helping you look at an entirely
new perspective of what financial planning is all about. Hope it also helps broaden your view of a financial plan.
No comments:
Post a Comment