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Financial Success Begins with a Plan

"If you don't know where you are going, you might wind up someplace else."-Yogi Berra

Financial planning

Financial planning is one of the most crucial steps for any person - regardless of whether they earn any income or not. A financial plan can act as a guide for your future and will help you be in control of your earnings, expenditure and savings. While many people understand the importance of financial planning, it is still one of the steps that are postponed or skipped. In India, little to no financial security is provided to retired employees. This makes financial planning a requirement for all households.

Financial planning is the process of building a personal financial roadmap to ensure your future financial security. Successful wealth planning depends on inputs from the following factors:

  • Complete understanding of your personal finances like your income, assets, and liabilities
  • Understanding your long-term and short-term financial goals
  • Estimating your capability of taking risks of investment
Investing and how does it work

“Investing” refers to the acquisition of stocks, securities, gold, real estate, investments in mutual funds, and other items of value with the intent of generating income or capital gains. Investing involves purchasing an asset at a low price and selling it at a higher price later; this type of return is known as a capital gain.
A successful investment plan involves the following steps:

  • Build a Foundation With Achievable Goals: Realistic goals provide the foundation for a solid financial plan. That is why it is important to codify your own.
  • Develop a Complete Financial Picture: Along with a complete picture of your goals and time horizons, a personalized plan must incorporate current assets and liabilities in order to establish your net worth and monitor it throughout the years to come.
  • Monitor and Optimize Performance: Finally, we believe a financial plan should be as dynamic as the life it represents. That is why we continually monitor your plan’s progress relative to your defined objectives.

Why is investing important

Following are the reasons why investing is important:

  • Helps monitor cash flow and curb unnecessary expenditures
  • Maintains an equilibrium between income and expenses
  • Encourages savings and wealth creation
  • Contributes to reducing tax liabilities
  • Allows to build potential wealth and ensure better wealth management for financial success
  • Ensures financial security in retirement

7 Benefits of Financial Planning

1Achieving Financial Goals

Every individual has financial goals. Some may strive to be independent of their parents, while others may strive to complete a world tour. Without a financial plan, you will save money every month for these goals, however, they will lack accuracy.

A financial plan sets in stone how much money you require to achieve a goal. When you customize a plan to include your goals and at which age the goal should be achieved, you can plan your finances accordingly. This ensures you don’t spend the money before you achieve this goal. It can help you make smart decisions about your money and reduce expenditure.

2Preparation for Emergencies

Accidents, business loss or illnesses cannot be predicted. These situations require you to prioritize health over finances. However, without a stable financial standing, getting the required support can become difficult or even impossible. This force people to borrow money or take out an extra loan from banks.

Executing and adhering to a financial plan means you have a specific amount saved. Emergency fund is one of the most recommended products in a financial plan. And if you’ve adhered to your financial plan, you will also have one. This emergency fund can then be used.

3 Improved Financial Understanding

Opportunities come with no warning. Whether you’ve come across an investment opportunity or for an opportunity to start your own business, these situations require you to come up with money and fast. Having a smart financial plan means you know where your money is invested.

Having a financial plan will ensure you are always aware of your current financial standing, where your money is invested or saved and how much of it is available to you. This allows you to be completely open-minded when you come across an opportunity or emergency. Furthermore, if you get any bonuses or raises, you have an acute understanding of where the money can go without requiring to consult several people.

4 Improved Standard of Living

A financial plan isn’t only a method to save money. If developed and executed properly, it can also help you grow your money. With accurate financial planning, you can invest your money in the right investment tools.

These can generate a secondary or even tertiary income for your family. This income, however small, can be used to improve your standard of living. You can use the money to pay off any loans without worrying about compromising your daily expenses or your dreams. It can help ensure you don’t have to worry about your household’s requirements if you have any additional expenses.

5 Financial Security

Financial security is the goal of every person in the world. Business owners or self-employed people don’t have the financial security provided by a monthly salary. Instead, their monthly income depends entirely on their business income in the month. This can make it difficult to provide financial security to your family.

A financial plan can help you secure your family’s finances and become independent of these constraints. With a good financial plan, you can save enough money to cover your monthly expenses. The financial plan can help you manage your money when your business has extra sales. This invested, safe amount can then be used to fund your family’s expenses in months when your business does not break the profit margin.

6 Financial Independence

Financial independence has been taught to most children in the form of a piggy bank. However, as adults, most people are tied to either their family or their loans. These can be barriers that stop you from pursuing your dreams or trying new avenues of life.

Making a smart financial plan allows you to be in complete control of your finances. You can move to a different city or take a new job or start a new business without basing the decision on your financial condition. It can help you pay off your loans and become independent.

7Get an Early Retirement

Early retirement is the dream of most Indians. After working 30+ years, most people aim to retire as early as possible. Unfortunately, without a financial plan or understanding of their finances, they’re left working the job until the maximum age. However, with a financial plan, you can save enough money to fund your lifestyle even after retirement.

By setting early retirement as a priority goal in your financial plan, you can save your money accordingly. The financial plan can also help you create your wealth so that you can continue the same standard of living even after your retirement.

By Making and sticking to a financial plan can help you achieve any goals in life you may have. Furthermore, it can motivate you to pursue other hobbies or avenues without worrying about your financial position. It can help you prepare for the future of your children and ensure you don’t have to compromise on an opportunity to pay for an emergency.

If you have questions about Financial planning, consider reaching out us

Financial planning

Disclaimer

The contents herein mentioned are solely for informational and educational purpose only

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

Please consult your CA / Tax expert for taxation before investing.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The value of investments can fall as well as rise. You may get back less than what you originally invested.

Mutual fund and other investments are always subject to market risks. Please read all, Scheme Information Documents (SID), Key Information Memorandum (KIM), Addendums(if any) issued there to from time to time and any other related documents or information carefully before investing. Past performance is not indicative or assurance of future performance or returns. Please consider your specific investment requirements before choosing a fund.

For any grievances, investors can contact at: hello@benchmarkinvestments.in,  Tel: +91-755-4938282 / +91-9826310337.
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