Why should one have financial Planning?

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The country's foreign exchange reserves swelled to a lifetime high of USD 490.044 billion, mainly on account of a rise in foreign currency assets
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It is important for one to ask itself- “Do I really need Financial plan?” Some may be investing their money in deposits or Systematic Investment Planning of mutual funds. But if one wants to earn more money apart from the savings and income, then one needs strong financial planning.

Lets first understand what do we mean by financial planning in order to know why it is important to take up a strong financial plan

Financial plan enables you to construct a road map to achieve all the financial goals and helps to build your contingency fund for any unforeseen events that may arise in the near future.

Now let’s look on how we can plan our financial needs from the below points:

  1. Streamlining your investment

If investments are made in many different areas, then it becomes difficult to manage or track the funds. It is important for one to manage a portfolio for many investments to ensure from any mishappenings of investments. Such investment portfolios with proper research and analysis can ensure a safe and healthy investment of savings.

  1. Invest in the Right Financial Product

Many people mostly invest in equity class assets given from the reference of their relatives, friends, colleagues already investing in such products without considering the risk appetite. 

This henceforth results in loss of investors money. Thus it becomes important for the investor to construct a proper financial plan with full research on the investment and make out possible outcomes for the desired result which yields the best situation outcome.

  1. Inculcating Regular Savings Habit

To create wealth for the long term, investing with discipline and determination is the key. It is important to invest on a regular basis and wisely to meet the financial goal. Investing a small amount on a regular basis can increase your wallet and reduce the burden of paying a huge amount in one go as loss of risk is eliminated to a huge extent. Therefore, it is important to have a planned investment for the planned set of investment assets which will result in the desired outcome.

  1. Calculating the Right Insurance Cover

Having made the right kind of decision for the right insurance is the right way to insure the family of any financial crunch in the future. Taking the right kind of decision today can secure the future of the family tomorrow. It is thus the responsibility of the investor to look into the available insurances for each and then build a proper financial plan where the insurance covers any damages or happenings for the future.

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