What is Financial Planning?
Financial Planning is a systematic way of investing the money as per different financial goals and attaining them in timely manner. Have a look on few examples:
- Purchasing a car costing Rs 10,00,000 in next 5 years.
- Planning for Child’s higher education Of Rs 50,00,000 after 15 years.
- Planning for Child’s Marriage Of Rs 75,00,000 after 18 years.
- Planning to purchase house for Rs 1,00,00,000 after 7 years.
- Accumulation of Rs 2,00,00,000 for retirement after 20 years.
- Protecting family through adequate insurance.
- Tax saving in efficient manner.
Objective of financial planning
Financial planning helps an individual to achieve financial goals in timely manner with proper planning of his money. This gives a direction to the savings and ensure that an individual need not to depend upon loans to meet its financial requirements. You will be surprise with to understand how easy one can achieve his financial dreams with proper planning. We will help you to accomplish yours goals by providing you financial calculators to create financial plan for you. Download them and customize according to your financial goals.
Goal 1 : Become a Crorepati
You have a financial goal to accumulate Rs 1 crore over next 15 years (customize as per your need in financial calculator). In order to achieve this financial goal you have decided to start a systematic investment plan (SIP) in Mutual Fund Scheme. How money you save every month to achieve this financial goal?
Goal 2 : Buy a House
You have a financial goal to purchase new house or to renovate existing house. So have a objective accumulate Rs 2 crore over next 20 years (customize as per your need in financial calculator). In order to achieve this financial goal you have decided to start a systematic investment plan (SIP) in Mutual Fund Scheme. How money you save every month to achieve this financial goal?
Goal 3 : Child Education
Educating your children is the prime goal of an individual. Rising cost of education is making tough for the parents to send their child to a reputed institute. Many of us are burdened by taking an education loan and paying lot of EMIs. So financial planning is right solution for you to achieve this goal stress free. We are providing you a case study for proper understanding of the concept followed by financial calculator that you can customize as per your need.
A child age is 1 year old and parents want to start his education planning for his graduation with a minimum amount of Rs 10 lakh (Today’s value). They have finalized a Mutual Fund Scheme that has a history of generating 12% return per annum through systematic investment plan. What amount he must invest every month to meet this goal? ( Child graduation will start at 18 years of age and inflation taken at 6% per annum).
Goal 4 : Child Marriage
Another challenging financial goal is to get you child married.Rising cost of marriage is making tough for the parents to accumulate right amount. Many of us are burdened by taking loan and paying lot of EMIs. So financial planning is right solution for you to achieve this goal stress free. We are providing you a case study for proper understanding of the concept followed by financial calculator that you can customize as per your need.
Same child is 1 year old and parents want to start his financial planning for his marriage as they planned to save Rs 25 lakh (Today’s value). They have identified a Mutual Fund Scheme that has a history of generating 12% return per annum through systematic investment plan. what amount he must invest through Mutual Fund SIP every month to meet this goal? (Important Note: Child’s Marriage planned 30 years of age and take inflation at 6% in consideration)
Goal 5 : Retirement Planning
Those who do not save enough money for their retirement will face tough time. Either have to live a miserable life without money or have to depend upon their children. In both cases lives an unhappy life. Our suggestion is to plan early to live comfortable retirement life. We are providing you a case study for proper understanding of the concept followed by financial calculator that you can customize as per your need.
A person is working in Pvt. job and his current age is 30 years. His package at present is Rs 1 lakh per month and he planned to retire at the age of 55 years and expect same standard of living after retirement. The current inflation rate is 6% per annum and he planned to built his retirement corpus though Mutual Funds SIP that is providing 12% return. How much amount he should contribute through SIP to live a same standard of living for 25 years after retirement? (assumption he will live till 80 years)
Conclusion
By this time, you have a fair idea that a good financial planning not only result in attainment of financial goal but save lot of money as your goal is achieve with the return generated by scheme itself. What we have found that most of us ignore financial planning and at the time of big expenses we depend upon loans and put our self in financial crisis. Also in this article few examples are considered for making you aware about this important aspect. There are many more financial goals specific to your requirement. So let’s start financial planning from today itself!
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