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)
1. By ViVeKam Financial Services Pvt. Ltd.
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2. * 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.
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3. * Salary – by rendering service to your employer
* Profits – from your own business
* Interest on savings – by investing and managing
surplus money
* Income from Property owned
When 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.
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4. “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
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6. A step by step approach to creating a sound financial plan:
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7. 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
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9. 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
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10. 4.Implementing the strategy with right products and services
There are several investment products available in each Asset Class to choose from
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11. 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.
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12. * 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..
