How to kickstart your financial planning journey

Financial planning isn’t just for the wealthy, no matter your level of wealth or phase of life, you can benefit from having a financial plan. On World Financial Planning Day, Money9’s special edition focuses on seeking key insights from the country’s best financial planning experts. Rajesh Krishnamoorthy, Suresh Sadagopan and Dilshad Billimoria speak to Sakshi Batra on what’s the best way to get started on your financial planning journey.

A simple way to look at financial planning

There are three basics that one needs to understand about financial planning. Firstly, financial planning is not at all a cumbersome process. Secondly, it is not a thing that you do when you have a lot of money and thirdly financial planning is all about numbers, said Rajesh Krishnamoorthy, FPSB. As a common man we have aspirations in life but many times people confuse financial planning with an elephant in the room that is difficult to decipher. Consider financial planning like a life plan. You have goals in life and then connect how will you achieve these goals with financial support.

“It is important to figure out the why of your investing first and then you can explore the ‘wheres’ and ‘hows’. It is not advisable to shot an arrow in the air aimlessly. You must first know why you are investing. To millennials, I suggest stay away from the herd mentality,” Krishnamoorthy added. Understand the what is the value that is adding to a particular asset class and then allocate it in your portfolio.

First steps

If you cannot seek the help of a financial advisor initially, you can blindly invest in Public Provident Fund (PPF) and ELSS. This is because these provide two-fold benefits, first, it gives automatic asset allocation to your portfolio, and second tax benefit. Don’t just spend the money, ideally save first, said Dilshad Billimoria, adding that don’t just splurge on gadgets instead start investing.

Financial planning

The basic thing we need to understand is that where are you today or where you stand today in terms of finances and where you want to go in terms of wealth creation. This mapping constitutes financial planning, said Suresh Sadagopan. The investments should be a by-product of financial planning.

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Watch the full video to know more…