Vivekam Concept of Financial Planning

By ViVeKam Financial Services Pvt. Ltd.

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* Everyone earns money with the objective to fulfill one’s goals and life ambitions.

* Money can be saved, accumulated and grown to fund various financial requirements or goals of a person.


* Salary – by rendering service to your employer

* Profits – from your own business

* Interest on savings – by investing and managing surplus money

* Income from Property ownedWhen future goals are to be funded by money earned today, money needs to be invested in an optimum way. Consideration should be given to the individual’s risk profile, time horizon of the goal and taxation aspects in order to maximize the returns on one’s savings.


“Financial Planning is the process of meeting one’s life goals through the proper management of personal finances”

Financial Planning explained in a 3 Step Process



A step by step approach to creating a sound financial plan:


1. Understanding your current situation and goals

* Financial position at any point in time is determined by the net worth of an individual

* It represents what a person owns (Assets) against what he owes (Liabilities or Debt) and what is his worth (Net Worth)

NET WORTH

ASSETS LIABILITIES

What you Owe

What you Own


2. Analyzing our financial needs


3. Develop an Appropriate Strategy

* To develop an suitable investment strategy it is important to first understand the various asset classes (or investment avenues)

*Prepare an investment plan that defines how much money should be invested in which option and how such asset allocation should be changed over a period of time

*Consult a sound Investment advisor


4.Implementing the strategy with right products and services

There are several investment products available in each Asset Class to choose from


5. Monitoring and Reviewing the Plans Periodically

*Why?• Periodic reviews will help understand where you stand vis-à-vis where

you should have been; and what corrective measures need to be taken.

*When?• Reviewing should be done once a year, although the portfolio needs to

be regularly monitored.

• Reviewing should also be done when situations demand for it. For example: When changes come by in terms on job changes / increments / loss, or change in goals, birth / death in family, changes in tax laws etc.


* Managing your finances was not so difficult in earlier days with High interest rates, Assured return schemes, Government sponsored retirement benefits, Few financial products, Modest lifestyle and Affordable cost of living.

* The economy and the personal finance landscape have changed drastically since the early 90’s as the Indian economy opened up and financial sector reforms were undertaken.

* It is therefore advisable to take professional help from a qualified and Professional FINANCIAL ADVISOR who is well aware of all the solutions, products and services options and who will be able to help you chalk out a holistic and sound Financial Plan..

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"Investment is a science, not an art"


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