Brace yourself for "certain" uncertainties.....

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Brace yourself for "Certain" Uncertainties:

One thing can be certain is the Uncertainty.... In life, in careers, in every of walk of life around us. And the reality is that no one can prevent it, but one can very well be prepared for it. And there are tools to prepare for uncertainties in life.. One such tool is "Financial Planning"......... 


Financial planning is a tool which matches your financial earnings with your financial goals, taking various factors as ingredients.

Now let's see the 7 most "Certain Uncertainties":

1. Sky rocketing Cost of Living:

Like it or not, cost of living is sky rocketing as never before. It's going to impact the plans drawn up for the future. Be it children education or future planning or retirement planning, the inflation is going to play a vital role. One thing is certain; that the inflation is set to rise further in the future. What is uncertain is the kind of rise that could take place and the extent to which its going to impact the future plans. Only financial planning can be a shield to tackle this.

2. Longer life span:

Thanks to modern medical technologies, people live longer as compared in the past, which is very good. But living longer also translates into higher costs of maintenance and health care expenses. Post retirement, the costs of maintaining the life style have to be carefully planned. With improved technologies, the longevity is set to rise in the future along with the health care costs. It's important to make a financial plan for the future to tackle uncertainties.

For eg., if one were to retire today and need a retirement fund of Rs 25 lacs, can you imagine what would be the same after 20 years? It's Rs. 4.10 Crores.



3. Shrinking returns on investments:

Returns on investments is shrinking in the present and could be shrinking even more in the future because of variety of reasons. But primary reason is that our lack of time to plan can kill the potential returns and more so when all our monies are parked in the bank account. On a relative basis vis-a-vis the inflation, the returns are set to nosedive if not planned and managed well. Gone are the days of high returns in the plain vanilla investment products where you just invest and forget. Only a specialist like a financial planner can guide you for maximizing the returns over the longer run.


For eg., if you are going to park Rs  1 lac in bank savings a/c @ 3.5%, after 10 years it would have become just Rs 1,41,060. But if you had parked the same 1 lac @ 15% investment avenue, can you imagine the returns after 10 years? It would have been a whopping  Rs. 4,04,790.... That's the difference a financial plan can make......

4.Clutter of investment options and choices:

Innovation in the financial products space will lead to invention of many products and avenues for our investments in the future. Busy and working professionals cannot be in the loop of these things for practical purposes, because tracking them is not their job. But this difficulty can potentially lead to huge loss of returns for the investors. As in the case of previous example, by just leaving the money in the bank can cause you a huge potential loss of returns. After all, the problem in the future could be because of plenty and not because of lack of avenues.

5.Ever expanding goals and aspirations:

Our aspirations and goals are ever expanding and they keep changing over the time. More so now, with the fact that there is a huge mobility of professionals to various parts of the world creating new aspirations and goals. Unlike our previous generations, when they were content with their limited goals and aspirations, the future is going to be ambitious and restless. And such aspirations and goals come @ a huge cost. So be prepared for it and make a plan accordingly.

For eg., what you might have planned five years back for protecting your life through insurance may not be relevant today. What you might have planned for your retirement five years back may not be relevant today. Because the goals and the aspirations of the people change quite rapidly.




6. WANTS becoming NEEDS:  

The rapid changes in our lifestyles have also resulted in ever increasing changes in our needs and wants pattern. This trend will indeed witness a sharp rise in the future as well, when more and more sweeping changes occur in the lifestyles.

For eg., Foreign education may be a want today; but a need tomorrow..... 

Remember, Today's WANT is tomorrow's NEED......





7.Ever changing life priorities:  

Priorities in life keep changing and they happen @ a rapid pace. What was a priority yesterday may not be one today and most certainly not for tomorrow. With the kind of work and careers we go through, they ought to change quite rapidly. It's difficult to foresee priorities 5 years or 10 years down the line. But a financial plan can handle this uncertainty quite well as it also tracks and incorporates the changing priorities very efficiently.

A disciplined financial plan can bring in lot of certainty in the world of uncertainties..Expert @ Money Avenues can help you make a sound financial plan. 

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)