Financial planning has become essential to maintain the current lifestyle, plan insurances, and provide your kids with the best education so that they can bring proud to you. Future planning calls for financial planning, to secure and safeguard your future, of course, you need money for business, health care, health insurance, kids’ education, marriage, medical disability, divorce, retirement, dreams, to pay off the debts if you have any. Financial planning usually involves saving, budgeting, retirement planning, taxes, property planning, saving, insurance and getting out of debt.
Making a smart strategy around wealth management, the major component that financial planning includes saving plans, offshore investments, and life insurance.
- Under saving plans there are some aspects like how to save money while continuing the current lifestyle effectively i.e investing money in plans that will get you a good ROI, or saving money so you can meet the college or your kid’s school fees or making a big purchase. So preparing a budget plan will enable you to spend money wisely and save it for the future. Creating a budget will create transparency of where the money is going and where the excess spending can be curbed.
- You can go for a Lump sum investment if you are looking for long-term gains on accumulated capital on deposit. You ask your financial planner about offshore investments so you can take advantage of significant tax breaks.
- Taking a loan or buying anything on credit with a low rate of interest but make sure that the investment tomorrow will give you good returns. Basically accepting a debt for an asset that will only appreciate in coming times is a wise decision. Deciding the good debt over bad debt will save you from future finical crunch. An example of good debt is to financing educational degrees @ low rate of interest but that would increase your earning potential.
- Saving for you retirement is most important, in young ages you can earn and meet your expenses but in old age you have added medical expenses, to support the expenses you need to save in retirement plans so when the time comes you don’t have to depend on anyone for your basic expenses. So retirement plans are to be worked upon well in advance while you are in your late thirties. You get a tax benefit in this as well.
- Purchasing life insurance will assure your family is safe and secure even if you are gone. Life is a too uncertain accident and calamities never knock the doors, in absence of the right insurance plan can put your family in trouble. But this totally personal choice, but if you have dependents then you must meet your financial advisor to find the right type of life insurance and health insurance.
Finding the Best Financial Planner for You
A good financial planner can prove to be a cornerstone of your success. He can help you in realizing your dreams by guiding and advising you on key financial matters like investment planning, tax planning, etc. Most of the people go to a financial planner only when we need some advice on a particular matter like debt management or when they are planning retirement, for getting all of the tax benefits or planning the type of life insurance policy you should have.
Financial planning is a roadmap keeping your goal and current financial condition in mind. Taking all the conditions that will significantly impact your financial life. A comprehensive financial plan prepared by a professional financial expert could include some or all of the following:
- Summary of your assets and debt
- Budget based on income and expenses to help you save for the future
- Evaluation of insurance coverage and needs
- Investment plan growing the money
- Property plan
- Impact of income taxes
- Consideration of changes in the law.
A financial advisor can play a vital role in advising you on how to plan your investments that you achieve your financial goals without stressing out. But how to know that the financial advisor you are hiring is a true professional and his advice is actually going to benefit you? You will find many in the market who will call them financial advisors. You must hire only those who are CPF (Certified Financial Planner). To be a CFP) it’s important for the candidate to have specific education that enables the person to guide others in key financial planning matters. Make sure that the individual or company you are hiring has passed the exams that are needed to be certified as a financial planner. After all, it’s your hard-earned money and you can’t let just anyone but the best to advise you on how to invest and where to invest it.
There is no substitute for experience when it comes to hiring a financial planner. The person you are hiring must have sufficient experience in the field. Don’t hire anyone who has experienced less than 3-4 years. There are some Code of Ethics that are set by the CPF board and all good financial advisors abide by that. Make sure you chose the one who complies and abides by the Code of Ethics. You can’t get the right advice from a person who doesn’t have your interest in your mind. You are only going to benefit if you are working with a professional financial planner who dedicatedly works for you and helps you in realizing your financial goals, otherwise, you are not stand to gain anything from it.
Look for the guys who have passed the exams conducted by Chartered Financial Analyst. These exams cover extensive topics pertaining to investments and financial administration. Such guys have a vast experience in handling complex financial matters and can guide you in a better way than anyone else.
Make sure you meet a few financial planners before you finalize anyone. You need to find out what type of cases they have handled and how long are they providing financial advice.
You don’t need to wait until you have enough money or are ready to retire to work with a financial advisor. Young people just starting out can benefit from financial planning just as much as married couples preparing to retire in a few years can. Whether times are booming or we’re in a recession, whether you just need help creating a budget, saving for your children’s college education, or you have complex retirement planning needs, anyone can benefit from financial planning.
A good financial planner starts with reviewing your financial situation and find out what your financial goals are. Then he will prepare a road map on how to go about achieving your financial goals