You are also one of the others who here financial planning word for the first time if yes then here you know the financial planning and it’s secrets how rich persons use and become financially successful
It is planning for money for the future to achieve your financial goals step by step.
This included management of past debts such as loans, debit card, bank corrupt, etc. And as well proper help you to achieve financial freedom.
This is an Ultimate complete guide because the exact guide helps my dad to clear his all debt and loans.
In a comprehensive guide I’ll cover:
So let’s understand deeply it will definitely help you to make your life easy and become financially successful.
1) Objective of financial planning:
The main objective of financial planning is to have sufficient assets or build your assets now to run your daily life smoothly and meet your long term goals debt-free.
Just break the chain and Do some math to plan your retirement:
Here is this,
This chain is followed by 92% of people in the world, remaining to do financial planning in which 5 % of people break the chain and they are financially stable and only 3% of people in this world are financially free.
Here is a story of Amit who was 45 years old, He was getting ready to retire in four years and said that he was at a phase in life where he couldn’t make a mistake.
He is looking for confirmation that he:
i) Would be able to continue with his current lifestyle.
ii) Would have enough money to retire.
iii) Would not be putting his family at risk.
i) 50% of the assets were in non-retirement accounts; this gave us the flexibility where he could draw income
ii) Ability to provide more than 98000 per year in income tax savings
i) He wanted to retire in four years
ii) He wanted to maintain his current lifestyle
iii) He wanted clarity and direction on how to replace his paycheck with efficient, predictable income that he would not outlive.
i) Investments were not tax-efficient (His estimated quarterly taxes would be 70000 rupees
ii) Capital gains issue (not controlled by the client)
iii) He needed to reposition his investments in order to smooth out his returns
iv) He needed to move from a score of 50 to a 92 on the LSS by shoring us the 15 risks that could derail his lifestyle.
Now he is looking for agency to achieve his goal because he has done some mistakes when he was young, that he does not start investing in early age.
If you are between 20-30 years old at an early age, then congratulations and understand the investment in deep and start investing by saving money.
Then what we have to do?
You have to start focusing on increasing your income by learning different skill sets. And set some financial goals and start achieving them,
Some set of example of Goals.
1) I am currently 20 years old I have to master a high paying skill set in 3 years eg. Pro Developer can earn up to 3,000 per Hour
2) The second goal is to become financially independent.
3) 3rd is to achieve financial freedom.
4) Insurance plans.
you can also read about credit card.
But the 3rd Goal is not easy for everyone to achieve and it’s never going to happen that money will come automatically to you and in case it happens then you got bore from your life easily. You have to always do some work according to millionaire best example is warren buffet.
Now there are two types of Financial Planning which we have to understand:
2) Personal Financial Planning:
Personal finance decides that you are going to live your life in the poor, middle class, or in a rich family. Of course, the planning for your Education is the responsibility of your parents but you have to plan for your children’s education.
You have to focus on your liabilities, and assets as well as you have an analytic of your income how it can increase because the inflation is increasing up to 6% per year it means if you have 10 rupee note today you can’t by the same thing from that 10 rupee in next year due to inflation rate. So plan your future goal keep in mind of inflation rates.
Think about both Long Term and Short term Financial Planning by brainstorming these questions.
Here is a worksheet for you just fill it by taking your proper time.
Not getting proper answer,
Then does this from now,
You have to create a five type of Bucket (if possible then accounts) in which you have to put your money:
- Necessity (60%) [Pay Biils]
- Emergency (10%) [In form of cash don’t touch in any condition]
- Investment (10%) [In Mutual funds, Liquid Fund, Gold, F.D, etc. Learn about investment]
- Learning (10%) [You have to learn new skills and attend seminars to increase your Income]
- Fun Budget (10%) [You have to fun and enjoy your life]
3) Factor Affecting Financial Planning:
- Your Lifestyle
- Risk of investment
- you have to wait for the proper maturity of the investment.
- Influence of knowledge.
- Uncertain and unexpected things.
4) Some Advantage of Financial Planning:
Financial Planning is important in your life and business, the advantage of planning is that you know when and where you have to take your next step in the financial world.
By planning properly and aware of every point of financial state can help you achieve goals and you know when and where to invest your money.
You know when to open the next bank account and what to do with it.
The biggest advantage is in your life you will never face a situation of bankruptcy and if you take a loan then is it for your next investment not for your debt recovery.
5) Limitation of Financial Planning:
The limitation is that we can’t predict exact future projections.
The market is changing all time we don’t know, what next technology is and which car is going to come after 30 years so according to that we have to update our goals and change with the environment.
We can’t make exact Goals on the basis of our current situation.
You are of any age group you have a chance to become financially independent take action today and plan your financial goals by making a proper decision you can definitely achieve your goal. you can also read about a mortgage.
Ans 1) Financial Planning helps you to find your Short terms and long terms of financial goals. The goal is to Control your Money. And track it by proper analysis, not your money let controls you
Ans 2) financial planning can be used for Personal financial planning and for Business financial planning to run your life and business successfully knowing all pros and cons.
Ans 3) Those who want to live financially free life or those who have big financial dreams whereas for businesses tax planning, prudent spending, and careful budgeting need to do financial planning.
Ans 4) Yes but real financial advisers are worth it.
Ans: You don’t need to find anyone just start taking advice from those who are already wealthy.