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FINANCIAL LIFE PLANNING

Financial Planning is defined as “Financial Planning is the process of meeting life Goals through the proper management of finances.”


One of the important and critical steps in the process of Financial Life Planning is Goal Setting.  It needs holistic approach to discover aspirations as well as need to adopt the life style which will be sustainable in longer term. One needs to think about non financial things affecting the lifestyle. It is about simplifying the lifestyle, spending quality time with family, changing own habits, nurturing the hobbies. During this process one understands money and the meaning. Money no more remains the end but becomes means to leave a sustainable and fulfilling lifestyle. Other financial goals can include buying a home, saving for your child’s education or planning for retirement. Financial Planning is important as each financial decision affects other areas of finance.


Financial Planning helps to organise finances, improve cash flow, lower personal income tax, plan for retirement, plan for children education, improve performance of the portfolio, enough insurance with minimal cost etc.


In India stock broker, insurance agents and mutual fund distributor etc act as Financial Planners. Most often they are more interested in selling a particular product under broader spectrum of Financial Planning. However, Financial planners is the person who helps to set and achieve their long-term financial goals  through investments, tax planning, asset allocations, risk management, retirement planning and estate planning etc. He may consult various intermediaries for certain matters, but he the one who provide an integrated service to the client to help him to achieve his goals. Bases on the fees there are three types of Financial Planners viz. fee only planners, commission only planners & fee and commission planners.


The financial planning process consists of six steps as below

  • Establishing the relation
  • Data Gathering and Goal setting
  • Identification of financial problems
  • Preparation of written alternatives and recommendations
  • Implementation of agreed recommendations
  • Review and revision of the plan

Various services covered under Financial Planning are, 

  • Investment planning : Planning, creating and managing capital accumulation to generate future capital and cash flows for reinvestment  and spending
  • Child Education and Marriage : Make necessary provision considering inflation for education fees and marriage expenses.
  • Retirement Planning : Planning to ensure financial independence at retirement.
  • Risk Management and Insurance Planning : Managing cover for Life Risk, medical expenses, householder and vehicle risks etc,
  • Cash flow and Liability Management : Maintaining and enhancing personal cash flows through debt management and lifestyle management.
  • Tax Planning : Planning for reduction of tax liabilities and freeing up of cash flows for other purpose.
  • Estate planning : Planning for intergenerational transfer of wealth and management of trust, writing of wills etc.

How to accomplish your financial goals through twin strategy of SIP and SWP It’s advisable to adopt the twin strategy of Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP) to meet financial goals.
Fri, 16 Feb 2018 10:12:01 +0530


Direct plans of mutual funds: Why do they suit everyone Product awareness campaigns by market participants and sustained backing from the regulator would motivate more retail investors to embrace direct plans.
Fri, 09 Feb 2018 10:35:25 +0530


S Naren Investors had forgotten the word ‘risk’ and now they will be more careful, said investors had forgotten the word ‘risk’ and now they will be more careful.
Wed, 07 Feb 2018 11:31:14 +0530


Dr.Renu Pothen GOI has decided to introduce a 10% tax on long term capital gains on equities and equity oriented mutual funds exceeding INR 1 lakh.
Fri, 02 Feb 2018 15:21:35 +0530


Lalit Nambiar Watch the interview of Lalit Nambiar of UTI MF with Prashant Nair and Ekta Batra of CNBC-TV18, where he shared his readings and outlook on the fundamentals of the market, and specific stocks and sectors.
Tue, 23 Jan 2018 12:04:32 +0530


Harsha Upadhyaya The expert believes that it would be prudent to tilt the portfolio towards largecaps, where valuations are slightly better.
Mon, 22 Jan 2018 11:01:26 +0530


Sunil Subramaniam In an interview with CNBC-TV18, Sunil Subramaniam, CEO of Sundaram Mutual Fund discussed the mutual fund (MF) industry wish-list and their expectations from Budget 2018.
Thu, 18 Jan 2018 14:56:59 +0530


Bill Maldonado The one thing they like about investing in India is the prudent manner in which the economy has been managed by the government and the RBI, said Bill Maldonado of HSBC Global AMC.
Fri, 12 Jan 2018 15:50:33 +0530


S Krishna Kumar The overall market is factoring in a lot of positive news, said S Krishna Kumar. Cues such as India being fastest-growing economy going ahead along with swelling order books of EPC firms are working well.
Thu, 11 Jan 2018 10:28:56 +0530

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