Financial Planning is a crucial aspect of life for humans because it aids people to set and reach their financial goals through investments as well as asset allocation, tax planning and risk management, as well as retirement planning. It is the process of maximizing capital by investing into various types of assets, in order to maximize their unique risk, reward and the characteristics of liquidity. This is why it’s important for investors to determine their financial needs and objectives, as well as their investment options and choose the best mix of options for investment. Financial planning is generally advised to begin as early at the time a person begins earning so that they is able to benefit from the compounding process by the time they are at retirement. Compounding refers to the calculation of interest earned using principal plus already earned interest. Every investor has their own objectives in their lives and to accomplish this goal in a planned and organized manner financial planning is essential and for financial planning to be successful over the long-term investors must be aware of the available funds in various ways and how to make the most of their available sources (finances) to get better returns within the timeframe set by them. energie vergelijken

Therefore, in simple words, financial planning could be described as an activity that aims to identify all the financial requirements of an individual, transforming the requirements into quantifiable financial goals for different periods in the future, and creating financial investments which will enable the person to satisfy their financial goals in the future. attain his/her personal goals. The purpose in financial planning is make sure that the appropriate quantity of cash is in the appropriate hands at the appropriate time in the near future to help achieve the financial goals of an individual.
The financial goals can be either:
I’m Buying a House

In order to provide to a child’s education, wedding or

I’m looking forward to retirement

They are measured using terms of money.
Financial needs of individuals can be classified into two categories that are investment and protection. A
earner member that allows his family to continue earning income after the end of his
Death is an example of the need for protection. In order to cover the wedding expenses
A daughter illustrates an investment of a daughter is an example of an Investment.
Thus, Financial planner assists the client to make the most of his/her existing
financial resources using tools for financial management to reach his/her financial goals.

So, mathematically, we can conclude:
Financial Planning: FR + FT = FG
Where are you?
FR = Financial Resources
FT = Financial Tools
FG = Financial Growth

About Financial Planner

The term “Financial Planner” refers to a person who employs the financial planning process in order to
Help someone else figure out the best way to achieve their goals in life. The most important thing is to
The role of a financial planner is to determine their financial planning requirements,
their current priorities and the products than adequate to meet their requirements.
requires.
The financial planner typically has the knowledge and experience of a vast array of
Of financial tools and of products for financial planning of financial planning tools and products, but the planner’s primary job is to aid
Clients select the right solutions for their specific needs.
The planner is able to take an ” huge picture ” look at a person’s financial situation and
provide financial planning suggestions that are suitable for the client.

The planner is able to look at the needs of clients in all aspects, including budgeting and saving,
taxes. Insurance, investments and retirement planning, or the planner could help
working with his client on one financial issue, but in its context within his general
the situation. Thus, planner stands aside from the other advisors for financial advice such as
tax advisors and insurance brokers could have been taught to focus on the needs of
specific area of one’s financial life.
The basis for financial planning
Financial planners usually follow “The Life Cycle Stage” to create a clearly-defined and measurable financial strategy for customers. Since the requirement for each stage of the life cycle is different, therefore a the financial planner must be cautious to create a suitable financial plan for their clients to ensure they can achieve their goals with the time-frame and budget. But, priorities can alter as people age and their situations alter.

The life-cycle of a person can typically be divided into the following phases:
I Childhood Stage
i Young Unmarried Stage
i Young Married Stage
I Young Married with Children Stage
I was married with children of a later Stage
i Post-family/Pre-retirement Stage
I am in the Retirement Stage

Methods to reap the maximum benefit from a financial plan
In to maximize benefit from a financial strategy retail investors should consider the following steps in consideration:
1. They must be aware of their goals well and have a clear understanding of how to reach them.
2. They must have a precise estimation of the timeframe of their own personal experience and observations to accomplish their goals.
3. It is not enough to rely on the advice of financial advisors or reports on the news and should conduct an exhaustive study on their own regarding the characteristics and potential of the returns that stocks can generate which a specific plan invests.
4. Don’t be enticed by the emotional whimsy that are a part of markets.
5. They shouldn’t be attempting to be able to time the market’s entry or exit. The most common method to enter the market is during the bearish phase.
6. It is important to evaluate their risk-taking capacity when looking to invest. If they are facing a issues, they should get help from financial experts.
7. It is important to regularly review their portfolios as and when the market is fluctuating or during times of inflation.
8. They must be knowledgeable about financial statements of these companies from time to time whose shares they prefer.
9. They must have a good backup of their financial resources in the event of loss that it occurs.
10. It is recommended to diversify their portfolios including mutual funds in the most amount they can to reduce the risk.