Basic and how to set a Financial goal By Jasbir Singh CFP

1. Personal Financial
Planning
JASBIR SINGH

2. What is Financial Planning for
Individual?
 As per Institute of financial Planning, It is the process by which individuals
and families develop and implement a comprehensive plan for achieving
their financial goals.
 In other sense
1. Identify Financial Needs at different times in Future
2. And ensure that right amount of Money is available in hand at right time
For e.g. Vinod Need 5 Lakh rupees 2 years from now to buy car
1. E.g of financial need which is not Financial Planning
Need 1 Crore right now to buy a house

3. Objectives Of Financial Planning
 Identifying the requirement for money for different purposes and
prioritising them
 Converting these requirements into specific needs, in terms of money, and
the time when it is require
What could be financial Goals?
1. Buying a house 50 lakh 5 years from now
2. Buying a car of 9 Lakh 2 years from now
3. Accumulating 12 lakh for sisters marriage 3 years from now
4. Accumulating sufficient fund for retirement to maintain pre-retirement
Standard

4. Financial Planning STEPS
 Step 1: Determine Where You Are Financially
 Step 2: Set Goals
 Step 3: Develop A Plan
 Step 4: Monitor Your Progress

5. Step 1: Determine Where You Are
Financially
 Calculating Your Net Worth i.e. Take a look at what you own—and what
you owe.
 Analyzing Your Cash Flow- Income & Expense

6. Step 2: Set Goals
 Questions to be addressed before setting goals
1. How long will you continue to work?
2. What will happen with your income -will it remain the same, rise, or fall?
3. What will happen with tax rates?

7. Step 2: Set Goals
 What investment rates can you reasonably expect?
 What about the rate of inflation?
 How much involvement do you wish to have in managing your
investments?

8. Short-Term Goals
 Pay off credit card and consumer debt
 Start savings plan
 Set aside cash for a contingency fund equaling 3 months' expenses
 Acquire term life insurance
 Acquire Health Insurance
 Acquire individual disability insurance

9. Medium - Term Goals
 Start college savings plan
 Diversify investment portfolio
 Convert term life insurance policy to cash-value policy
 Contribute maximum to Retirement Funds like PPF, Atal Pension Yojna
etc.

10. Long-Term Goals
 Purchase retirement property or Asset
 Retire between 60 to 65 years of Age
 Maintain pre-retirement standard of living during retirement

11. Step 3: Develop Your Plan
 Flexibility
 Liquidity
 Minimization of Taxes

12. Flexibility
 You need a plan that's flexible enough to change with your circumstances
throughout the major and minor life events you experience.

13. Liquidity
 Most financial advisors recommend that you have funds available that are
equivalent to 3 to 6 months of your expenses.
 Appropriate locations for these funds are current, savings, fixed Deposits
and money market accounts.

14. Minimization of Taxes
 Minimizing taxes must serve as a means to meet your objectives; it isn't
an end in itself.
 An effective plan will minimize both income taxes and estate taxes.

15. Step 4: Monitor Your Progress
 Here are the general questions to ask:
 Have your financial goals stayed the same?
 Are you meeting your budget?
 Are you earning the investment rates of return you anticipated?

16. Step 4: Monitor Your Progress
 To what degree is inflation affecting your finances?
 Has your tax situation changed?

17. Thank You