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Workshop_Financial Planning
- 1. By- Shilpi Johri, FinancialPlanner Financial Planning Awareness Workshop
- 2. Agenda • Life AspirationsOverview • Roadblocks • Financial Planning: A scientific solution • Contents of a plan: Sample Financial Plan walkthrough • Benefits • Process • How Financial Planning has helped
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- 4. You wish youcould… Own a luxurious home Get your kids educated in the best schools Enjoy vacations at exotic places Save sufficiently for ceremonies Buy a big car Leave a rich legacy behind Retire early and enjoy your hobbies Live your post retirement life as you live today
- 5. But the realityis… Definitely won’t get a good bonus EMI for present home loan has become never ending All professional colleges have increased their fees High credit card bills Meager salary raise this year, forget promotion Even a minor heart ailment can set you back by over a lakh rupees Lost so much of savings in the last market crash
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- 7. You think… • Havingmore money will solve my financial worries • I know where my money goes so why do I need a budget
- 8. You think… • Ihave been investing in PPF, NSC and FDs only as I don’t want to take risk • I am an aggressive investor I trade in equities only
- 9. You think… • Ihave 8 insurance policies, I am fully covered • I buy an insurance policies every year to save tax
- 10. You think… • Ihave been investing in PPF, NSC and FDs only as I don’t want to take risk • I am an aggressive investor I trade in equities only
- 11. You feel… • Let’senjoy my life today, saving can be started later on as I have a long earning life ahead • Loan is a convenient way of buying things you cannot afford today
- 12. Why… • My friendhad made a lot of investments but When he met an accident his family had to borrow money from their relatives
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- 14. Financial planning…a scientificsolution
- 15. What is it? Wheredo you want to reach tomorrow? Where you are today? How do you plan your journey?
- 16. What is it? FinancialPlanning is a dynamic process of meeting your life goals through proper management of your finances
- 17. Contents of aplan: Sample financial plan walkthrough
- 18. Contents • Current situationsummary • Goal and Gap analysis • Execution plan and action items • Observations and recommendations: cash adequacy for goals, investments, insurance, assets and loans • Situation analysis and projections: snapshots of income, expenses, insurance, investments, loans, Net worth, saving patterns • Cash flows: current and projections
- 19. How does FinancialPlanning help us?
- 20. Benefits Comprehensive Financial Planninginstills greater confidence in you by: • Presenting ‘The Big Picture’ of your financial situation by analyzing every aspect of your personal finance and thereby identifying the gaps • Evaluating both favorable and unfavorable future scenarios and adequately preparing you to deal with them • Equipping you with the financial roadmap and simple actionables
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- 22. What is it? Establishingand defining the client-planner relationship
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- 25. Do we havethem? Yes! Look for a… Certified Financial Planner CM
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Editor's Notes
- #8 1. Bad news here! Increase in income does not solve any problem. Money problems are a symptom. It probably can be handled by breaking entrenched patterns of spending, handling finances, mindsets etc. A new job giving more money, is not the solution. 1.Your income has increased 3 times in the last 6 years, have your savings also increased by 3 times 2. Yesterday you bought 500 rs. Shirt now 1500 rs., earlier you had a maruti 800 now you want honda civic but does it hold true for savings also? You living expenses or standard of living has increased but what about my financial safety net (Building a financial safety net to prevent financial disasters caused by catastrophic illnesses or other personal tragedies. And saving Choosing and following a course toward long-term financial goals such as buying a house, sending your kids to college, or retiring comfortably. ) So it should be rather Expenses= Income – savings and not the other way round. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------1. Budgeting (all companies prepare income-expenses sheet then why not you) 1. Impulsive buying To those of you who think you know where your money goes without keeping detailed records, I issue this challenge: keep track of every rupee you spend for one month. I promise you'll be surprised and perhaps shocked by how much some of your "small" expenditures add up to. Controlling your financial affairs requires a budget. For many people, the word "budget" has a negative connotation. Instead of thinking of a budget as financial handcuffs, think of it as a means to achieve financial success. Whether you make thousands of dollars a year or hundreds of thousands of dollars a year, a budget is the first and most important step you can take towards putting your money to work for you instead of being controlled by it and forever falling short of your financial goals. Credit card allows you to spend more than you can afford and keeping multiple cards makes you loose track of total debt accumulating and if some starts rolling over then you are caught Credit card debt is a major problem in this country. While not everyone has a credit card, those that do typically carry a balance. The interest rate on a credit card balance is usually between over 40% APR. These high interest rates make it difficult for people to pay down their debt -- especially if only making the minimum payment. In fact, just making minimum payments can make even the smallest balance over a decade to pay off and thousands of dollars in finance charges. It’s no wonder getting out of debt seems so hard. While this payment strategy will help you get out of debt, you can potentially make things go even faster with a few other tips. First, call your credit card company and ask about getting your rate lowered. This won’t always work, but if you have been on time with your payments and a decent credit score, they may be willing to work with you. It doesn’t hurt to try and it doesn’t cost anything. The worst they can do is say no. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Having some investments and insurance does not mean your goals are going to be met. It needs to be properly validated if what you are currently having and what you are continuing to do is sufficient. Also, whether what you are doing is aligned to your long-term requirements also needs to be validated. If they are not, the ones that are taking you on a tangent needs to be discontinued and new ones put in it’s place.