Why do you need The Financial Plan
Very few plans remain same for next 5 years. If you haven’t looked your plan recently then it’s the time to take a close look into your financial plans. It’s very easy to make mistakes in planning if you don’t record, review and updated it as per the needs. It has 5 parts in total and two of them are responsibilities and actions. The other three can be examined separately for a developing a plan.
Let’s start with what kind of strategy one should have while doing financial planning:
- To start with a plan the question one must ask himself/herself is: What I need to do with this;
Getting rid of debt, Savings for education, Savings for down payment of a house or business, Savings if you lose the job and savings for retirement. Getting insurance!
- Consider the contribution of others in this; Your spouse, children or parents & of course mortgage lenders.
- What am I trying to accomplish with this; Accumulating financial savings, Income, buying properties to generate income, Buying a house for retirement, risk aversion with Insurance etc.
Once you are aware that why you made this list, that’s when you are ready to prioritize it. Here it becomes easy to identify the unrealistic goals.
The next step is how to do it or in simple language – tactics. The delegation of your work plays a key role and is easy to manage. You can contact the real estate agents for the property, insurance advisor for Insurance, an Investment advisor for investments, accountants for tax related issues and lawyers for agreements. The delegation of the task is a sound decision. The only thing that you must be knowing is what do you want to achieve with what you have.
The third part of the strategy is Just doing it. There are things like wills and POAs which you might want to do by yourself. But the risk is you do not know much about it and there is a huge margin for errors. Trying to do it by yourself could be a win small and lose the big game. It might hurt you when it’s the time to use it.
A financial plan may change every 5-8 years. This happens because you have some changes in no. of family members, change in your jobs, changes in income, you have moved to a new and bigger house, migration and accounts etc. It’s an exercise that needs to be done with care. Make sure you if it’s too complex for you then either you are doing it wrong or the wrong person is helping you to do it.
Munish Mehan arranges Life Insurance for people who understand the value of Life insured Estate. He can be reached at email@example.com
You can connect with him on LinkedIn