Financial Planning

By: PrakashKundnani
Asst. Prof. UIM
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 FPTM Syllabus Contd..
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 Financial Planning
Financial planning is a step-by-step approach to
meet one’s life goals. A financial plan acts as a
guide as you go through life’s journey.
Essentially, it helps you be in control of your
income, expenses and investments such that you
can manage your money and achieve your goals.
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Financial planning is the process of achieving

your life goals by using different investment
options with your current resources through
proper and disciplined money management.

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 Benefits Of Financial Planning
• Increase your savings.
• Enjoy a better standard of living
• Be prepared for emergencies
• Wealth creation
• Retirement planning
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• Child’s education
• Tax Saving

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 Myths About Financial Planning
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 Financial Planning - Process
Goal Setting

Rebal Analysis of
Current
ancing Situation
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Asset
Allocation

Investment

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 Goal Setting

• Write your goals and be specific.

• Identify your time specific goals.

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• Set Priority.

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 Categories of Financial Goals
• Protection / Risk Management.

• Emergency Fund.
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• Debt Reduction Planning.

• Investment Planning.

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 Analysis of Current Situation
Determine the status of your current
finances, viz., your income, expenses, debt,
savings and investments. For this purpose
one has to identify his net worth and
should prepare cash flow statement and
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budgeting. This is the first step in financial

planning, as it gives you a good sense on
the state of your finances and ways to
improve.

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 Asset Allocation
Asset Allocation means distributing your
investment in different asset classes like equity,
gold, debt and marketable securities. There is
no single asset which offers positive real
returns under all conditions. There are various
factors which affects asset allocation :
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 Time Horizon.
 Risk Appetite.
 Different Life stages.
 Past experience.
 Net Worth
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 Risk Tolerance - Categories
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 Various investment risk
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 Guaranteed and Non Guaranteed Return Investment
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 Impact Of Inflation - Table
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 Impact Of Inflation - Table
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 Regular Monitoring
The financial planning process does not end
once you invest your money. You also need
to monitor how the funds are performing
regularly. If they don’t perform, you may
need to replace them with better
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performing funds. You also need to follow

your plan because as you grow older, your
goals and dreams evolve.

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 Rebalancing
It’s the ultimate art and science of wealth creation.
Rebalancing is the periodic adjustment of your portfolio to
protect your current gain with effective risk management to
achieve your financial goal.
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 Rebalancing
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 Financial Planner - Function
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 Financial Planner ?
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 Points to be considered before selecting Financial Planner
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 Questions For Selecting Financial Advisor
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 Importance of Will and Power of Attorney in
Financial Plan
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 SIP, SWP & STP
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 Conclusion

Benjamin Franklin has rightly said, “If you

fail to plan, you are planning to fail.” You
may have several different financial goals
you wish to achieve but to reach them at
the right point in life; you need to have a
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financial plan in place at a very young

age.

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