Every individual cares to plunge into some sort of risk in yield a positive result that might not be expected beforehand. But the level of such risk goes a little high that are based on investments and its procurement. This is because there might not be a single person who is not at all engaged in chasing his treasured dream of becoming reluctant about money before an appropriate financial planning investment. It is a common observation amongst those students who try to study abroad and also for those employees who looks for a stable professional life. A financial advisor in India can offer worth making guidelines before such investments based on financial aspects to such individuals. For desired achievement of the goals an individual can seek advice from a financial planner as well. A financial advisor can also be depicted as a mentor for aspiring individuals that need valid and authenticated information on insurance, tax, etc. which automatically binds itself inside a single financial plan.
There are many people who prefer to hire financial advisor in India only when they try to incur or go in search of information on specific issues and matters such as paying down payments, procuring a retirement policy before time, health insurance, investments made on a future aspired project, etc. But no matter with what perception and need an individual looks for a financial advisor, but their profitable suggestions can also help in getting motivation and also confidence before making an investment. But behind all these countable aspects, the first thing that an individual should perform is the calculative assessment at his own risk in matters related to money. A financial planning investment should be entirely based on your personality as no single individual can have similar sort of risk taking trait. Just like the DNA chains of a chromosome every single person possesses unique perceptions and risk taking characters. Some can bear a huge loss while another may not recover from a minor hammering on factors and conditions that deals with finance and wealth.
So an estimated calculation counts a lot before any financial planning investment based on considerable factors like present income source of an individual, liquidity, years left before a retirement, health related safety concerns, tax benefits, etc. This is because ignorance maintained before a financial decision in the life of an individual can at times turns him from riches to rags and vice versa for a planned and secured investment of the same.
Now Is The Time To Short
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HAVING A GOOD FINANCIAL PLANNING
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As a follow up to my previous article – ACHIEVING YOUR FINANCIAL GOALS THROUGH PLANNING AND LOANS- I decided to create this one. We can never over-emphasize the importance of making a good financial plan and that is the purpose of this article. Making a financial plan involves great concentration and dedication. Below are the ways you can create such a good plan.
CREATE A FINANCIAL JOURNAL
Ideas stored in the brain or mind is only there temporarily, emotions can hamper their shape and sizes. Writing these ideas down is a great way of removing the vague nature of a mind-stored idea. Get a paper or a note and write down your ideas. This gives it the right shape and size and helps you to easily nature them. By placing the journal where you can easily see it and pick it up to read help you concentrate on them and work towards it. But remember to read it daily and also remember to give it the SMART feature i.e. your ideas should be Specific, Measureable, Attainable, Realistic and Timely.
PRIORITIZE
Now that you have your list of goals, it’s time to prioritize them. Give them levels of importance on a scale of say 0 – 10 with 0 being the least important and 10 being the most important. After this create another list with this ordered importance. It should also be advised to give them a time bound or period; this helps it to be more specific and to pick up one goal at a time.
MAKE A BUDGET
It’s time to create a personal budget. Having a budget does not make you a poor man. The rich do have a budget else they would have run out of their resources. Warren Buffet bought his present house 50 years ago and he still cherishes it. It’s a 3-bedroom house with no wall and fence and he says it has all he needs in it. What is the message here? Live within your earnings and how what you want and not what the Jones have. And this is called planning or budgeting. It’s so important that even nations don’t do any spending without first having a budget of the financial year which it should run.
IMPLEMENTATION
After the budget creation comes implementing it. It is not enough to create a budget but to follow it up to the latter. The budget is a blue print of how your spending would be for the period running, so if you don’t follow it up you will be running the “red print” which will always put you in the red making you debt stricken. You can start a savings account, opening a mutual fund, buy a small real estate deal, or even invest in stocks. But whichever you choose to do, always seek the advice of a financial adviser.
REVIEW YOUR GOALS
Now that you have these plans running, you would need to periodically review your journal of prioritized goals or ideas. Are the processes you have set meeting the purpose of you planning. If no, then redefine your goals or implementation method(s).
REPEAT STEPS ABOVE
Next you have to be continually repeating the steps above and you will be on your way up.
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Reaction – A Conversation With Warren Buffet – Bloomberg
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A Recap of Buffett Interview – Live! from New York, NY: Analysis and Discussion with Guy Spier of Aquamarine Capital Management (Bloomberg News)
Are you in control of your finances? Unless you’re very unusual, the answer is probably no. And if that’s the case, it means that you’re probably losing out big-time. Read on to discover the two keys that get you started with effective financial planning.
Sure, there are more aspects to financial planning. However, these two major keys are absolutely essential, and without them, none of the others matter. So they’re the ones you should start with:
1. Create a Plan
When you plan, you set up a sequence of actions you intend to take that will take you where you want to go. And if you have such a plan, you’re much more likely to get there than if you don’t. In spite of that, most people don’t plan how to make money. They plan even less how to allocate their income to create wealth. Instead, they rely on “winging it”, and end up making mistakes.
What can you do to get better results? Focus on clarifying and articulating your destination. Start with the goal and work backwards to determine what it would take to achieve that goal.
Let’s say that a child’s education will cost $50,000 at some time in the future. From that goal, you can work backwards to determine how much you need to save each year (assuming certain rates of return) and what investment programs you can use to achieve that goal.
And you won’t have to do it alone. There are some really good financial planners out there who can help you plan for your financial goals and help you achieve them.
2. Invest with Purpose
Once you have determined your financial goals, then, and only then, you’ll be ready to determine how to invest the money for those goals. There are several different types of investments, and all of them may have their place within a properly structured investment strategy.
For each account, you’ll need to figure out the purpose you want to achieve. Only then you’ll have a basis to determine what investment vehicle to use to best accomplish that objective.
People can lose money when they haven’t matched their purpose to the investment. For example, when you are saving for a car that you plan to purchase in 3 years, you wouldn’t buy stocks or annuities. On the other hand, if you are saving for retirement income in 25 years, you wouldn’t put the money in savings accounts or CDs.
Why not? Stocks, while potentially offering terrific growth potential in the long term, are too unpredictable in the short term. If you need your money in three years, the market may or may not be in a good place to sell stocks. CDs, on the other hand, play it much safer, but they don’t have as much earning potential as stocks. So you don’t want to use them for funding very long-term goals, such as your retirement. On the other hand, they’re great for short-term goals such as saving for that car.
These two keys to effective financial planning can make the difference between achieving your life goals on one hand, and not achieving them on the other. Money is the fuel that propels these goals, and the way you handle it will mean the difference between success and failure.
