Nine compelling reasons why you need a personal financial planning advisor...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Financial Planning is a process where in you identify your future goals and objectives based on the current scenario. The current macro economic dynamics necessitate a professional approach to financial planning. Macro factors like the economic growth, inflation, interest rates, corporate performances, equity markets and the micro factors like the individual's career growth, disposable savings, goals and objectives combine to influence the financial planning process.

A hard core financial planning advisor will be able to give a robust road map to the future with necessary adjustments based on the prevailing conditions. 

It's vital to have financial planning advisor for the following reasons:

1. To restructure chaotic personal investments:

For various reasons, mainly due to lack of time, our portfolios are generally not in order and not properly structured. Do we have enough insurance cover on life and health? Are we invested on a proper asset allocation model? Can we restructure the portfolio? What are my goals and objectives? are some of the queries one might be faced with.

 

2. You are very busy and working hard; which leaves no time for personal financial planning: 

 

It's good that you are very busy and working hard, which is a sign of prosperity and faster growth. But should not be at the expense of your personal goals and objectives. It's critical that you deploy all your financial resources very effectively and that may not be possible for you with time being a major constraint. Hence the necessity of a personal financial advisor.

3. You need a financial planning coach to achieve your overall financial success:

With the tremendous flow of information in the internet, every one can attempt to do their bit of financial planning on their own. But a dedicated coach can definitely do a much better job. Remember the world champions in the sports do have coaches... Likes of Roger Federer, Rafa, tiger woods have had coaches. Though they know their games well, coach takes care of the game plan. Think about it. 

Remember getting information off the internet is like drinking water from the fire hydrant.

4. Dynamic financial markets and dynamic personal goals need  attention all the time:

Financial markets and personal goals are quite dynamic in nature. They need constant review and re-adjustments to suit to the current scenario. A financial planning advisor is better placed to constantly monitor and make the necessary changes in the plan.

5. Financial planner guides your money to work hard, as hard as you work for earning that money: 

Keeping your hard earned money idle or in a bank is not a good idea at all. Given the fact that there lot of avenues to park the money quite effectively.  Let your money work as hard as you work for earning that. A financial planning advisor is better placed to do this job.

6. Financial Planning advisor for one stop investment solutions:

With the kind of work schedules we pursue, its just not possible to effectively manage the nuances of financial planning on our own. Keeping a track of products, investment choices, constantly changing personal priorities, monitoring the economic environment is best left to a professional financial planner who can deliver the solutions effectively.

7. Financial planner will help you prepare your goals in a SMART way:

Our careers/jobs are getting quite dynamic and it definitely makes sense to have clear plans and goals for securing our future. Priorities undergo constant changes. Goals can be short term or long term, personal retirement or children future,  but they are better off by planning  well in advance. There are attractive ideas for planning them in a SMART way through a financial planning advisor.

8. Financial future is a long road ahead; a financial planner can effectively guide you through:

It's quite difficult to predict things on our personal or professional front, as we live in a very dynamic world. But the uncertainty can be managed to a large extent by making solid financial planning for the longer term. So try out and make solid financial plan and its the job of the financial planner to plan, review your goals and objectives and make necessary adjustments in the financial plan.

9. Millionaire or not; you still need a financial planning advisor:

Millionaire or not, you still need a financial plan/ financial planning advisor, off course the priorities differ for each one of them. But it's relevant for anyone who has goals and objectives for securing their future.

In your and your financial future's interest, its best to have a financial plan in place. 

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Seven tips to avert a financial tsunami

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Here are the seven tips to avert a financial tsunami in your life:

1. Its your life - Insure it well

It takes an actual tsunami to understand the value of a human life.  The first and foremost tip to avert a financial tsunami is to insure your life and insure it well. Take a comprehensive, up to date and a whole life insurance cover which can be a good cover in times of serious distress.

2. It's your health - Insure it well

Health concerns are on the rise owing to drastic changes in our lifestyles. It's better to have comprehensive health cover apart from what your organization is providing for.

3. Keep a tab on your debts:


Keep a control on your debts, mainly on the credit cards and the loans. Relook  some of them to see if you can retire or restructure them. 

4. Have an emergency fund:

Financial emergencies can strike at any time. Create a fund which can take care of the emergencies arising in any form. 

5. Save Wisely:


Save wisely and live well within your means. Ensure you save a set amount every month out of your income.

6. Invest Intelligently:


Mere saving is not important; but investing them intelligently is critical. Keep an eye on inflation which is eating your money power. Invest in instruments which can be efficient and return generating. Thumb rule is start saving early and invest at the earliest. Because the power of compounding is at work very silently. 

7. Make a financial plan
 

Key and crucial ingredient to avert a financial tsunami is to have a well thought out and well designed financial plan. Seek a well informed financial planning consultant to work out a plan. 

Experts from Money Avenues can assist you in making a well structured financial plan.

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Financial Planning tips presentation

 Financial Planning Tips here....



http://www.slideshare.net/moneyavenues/future-planningppt-7173412

Seven habits of highly effective financial ensurers......

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Ensuring your and your family's financial future is paramount in today's dynamic world. Insuring the precious life is the key to the financial ensurance. Though human life is invaluable, for practical reasons, its better to value the life. And life insurance is a great tool to do that. 

The fundamental objective of taking a life insurance is to leave a sum to our family/dependents on our absence. In essence it means, what's the individual's worth and what would the family deserve in one's absence.

Here is a check list of the seven habits of highly effective financial ensurers:

1. Never treat insurance as an expense:

 



















The first and foremost error most of us do is to treat insurance as an expense and as an unnecessary outflow. It is not, for the simple reason that your precious life is covered for a sum which is quite affordable. It ensures your and your family's financial protection.

2. Never mix insurance and investment - Hybrid is a bad idea:

 

• The primary objective of the insurance is to insure the lives. 
• There are other avenues like mutual funds which offer investment solutions , particularly for equity investing. 
• It is a bad idea to combine insurance and investment in an insurance policy.
• Keep insurance and investments separate.
• Take enough and more insurance cover.

3. Never underestimate your life's worth: 

Your life is worth more than what you think is. Definitely more... So never under insure. Its not a good idea to have very low cover or at times no cover at all... After all its your life and its about your family's expectations from you. Higher cover is not better, its the best.


The ideal way to arrive at a value is -

Your annual salary * 10 times (at least) should be your cover at all times.

4. Never buy an insurance just for tax saving purpose:

Saving for taxes is very fine, but one should not buy an insurance only to fulfill the tax obligations. In the process you end up buying very little insurance for yourself. And if someone starts with a salary of Rs 5 lacs and based on that buy an insurance, after few years the person would certainly be under insured because his salary levels would have gone up significantly.

5. Buy an insurance which covers your whole life:

 
























Buy an insurance which should cover your whole life and not only a part of your life. In essence it means you should have a cover till your survival. Thanks to medical innovations, people live longer compared to the past. And the risk to life is higher at the later stages in life.

6. Have up to date insurance cover:

People grow quite fast on the career and salary ladders. Its better to upgrade insurance cover commensurate with those levels. If one's salary is 10 lacs, insurance cover should ideally be 100 lacs. If the salary in a few years time go up to 25 lacs, the insurance cover should also proportionately increase to 250 lacs. So be up to date in your insurance cover.

7. Take the cover at the earliest; remember there is a huge cost for the delay:

Buy the right insurance cover but buy it now.. Remember there is a cost of delay for such things. Earlier is not better, its the best. 



(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Amazing story of three friends - Part 4

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)


Three friends Mr. Smart, Mr. Responsible, and Mr. Fun aged around 50 meet up after a long time in the Alumni Club. After the usual chats on the good old days, the discussion turned towards investing habits. 



Mr. Smart was proud of his investment habit, he said "I have been been saving and investing since my age 30 and made good 15% returns".


Mr. Responsible said "I started my saving and investing once I established my family at my age 35 and made great returns of 12%". 



Mr. Fun said " I enjoyed my life thoroughly, went on foreign holidays and started my saving and investing only at the age of 40. Anyway I am not interested in big returns and was happy with a return of 10% ".

Now, let's for a moment assume, three of them put Rs. 1 Lac each. 

• Mr Smart put 1 lac at the age of 30 earning @ 15%.
• Mr Responsible put 1 lac at the age of 35 earning @ 12%.
• Mr Fun put 1 lac at the age of 40 earning @ 10%.

Now let's see who wins the race.....

At 50, during the time of their get together, can you imagine what kind of money each one of them would have made?

Mr. Smart put Rs 1 lac at his age 30 and at his 50, he accumulated @ 15%

Rs.16,38,000

Mr. Responsible put Rs 1 lac at his age 35 and at his 50, he accumulated @ 12%

Rs.5,48,000

Mr. Fun put Rs 1 lac at his age 40 and at his 50, he accumulated @10%

Rs.2,60,000

Result: Mr. Smart, @ 15% made a whopping Rs 13,78,000 more than Mr. Fun, who got 10% ; And Mr. Smart made  Rs 10,90,000 more than Mr. Responsible, who got a return of 12%. 

Moral of the story:

Saving should not only begin at the earliest but should be maximized. Trying to catch up at the later stage may not yield desired results.


As we saw in this case, the winner was Mr. Smart  who made higher returns than the other two 1) by starting early 2) by maximizing returns.

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Seven habits of highly effective financial parent.....

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Parental responsibilities in the current scenario is quite challenging with the kids catching up very fast than what we could imagine. They also grow up with unlimited ambitions and aspirations. It's the duty of the parents to regulate their thought process as it involves huge financial implications. It is also crucial to teach them the values of life with reference to money . Let's look at some the key points here on financial parenting:

Seven habits of highly effective financial parent:

1. Preaching financial values to the kids:

Preach them the life's values particularly the financial values as they never carry an expiry date. Story telling can be a very effective tool to preach such values at their young age. Values such as

a) Saving money.

b) Helping others.

c) That there is a life beyond money.

d) That money is not the only thing in this world.

e) Difference between " I want" and "I need".

Just to mention a few...

2. Moderating and managing their expectations:

Kids are growing fast and ambitious. It's good to have reasonable, attainable ambitions, but with the kind of peer pressure and other factors, kids tend to develop higher level of expectations from their parents. It is essential to manage their expectations and moderate them in an appropriate way. Because unmanaged expectations can imply a huge financial burden.

3. Openly communicating the family's financial realities:


Make them understand the family's financial realities which can develop a healthy financial atmosphere @ home.

4. Desisting from huge and unmanageable financial commitments:



It's not a great idea to shoulder huge and unmanageable financial burden for the kids as there are better ways to fund their goals and aspirations. 

5. Teaching them the importance of financial independence:

Kids must be taught to be independent and more so financially from the younger age. They must also know what costs are incurred on their school, college education and how are they managed to be paid. Bottom line is that they should not think money is easily made. They must also be encouraged to look at sponsorships and grants to reduce the financial burden of the parents. It's a good idea for young adults to work as interns and trainees which gives them the responsibility of earning and spending the money on their own.

6. Financial planning for the children's future:

Planning your child's future becomes essential, given the fact that the costs are escalating in the space of education. Planning also ensures that the financial burden is spread over the time which eases the stress when they grow up and get ready for higher education.

7. Planning the distribution of wealth to the children:

On distribution of wealth to the children, billionaire Warren Buffet once remarked “Enough so they can do anything, but not enough so they do nothing”. The prophetic words should be a great eye opener for all who would want to distribute their wealth to their children. Wealth distribution should focus on children to earn it and not own it. Create wealth wisely, but distribute it responsibly...



(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Seven financial habits of highly effective 40 year olds...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)

Age group of 40s is the crucial stage in one's life in terms of  income generation and income distribution. A properly planned 40s will lay a strong financial foundation for the future which includes retirement and other financial goals. The following are the seven financial habits of highly effective 40 year olds...

1.Follow "Financial Parenting**" diligently:


 

Kids of today grow with unlimited ambitions which sometimes may be reasonable and sometimes unreasonable. They may ask for the sky and the moon. It is the duty of the parents to regulate the flow of ambitions as they come up with huge costs in the present scenario. Hence the importance of "financial parenting". Let's look at it very briefly:

a. Teach the kids, the value of saving.

b. Help them understand the difference between "I need" and " I want".

c. Manage their expectations, particularly when it involves borrowing.

d. Openly communicate the family's financial situation.

e. Teach them manage their regular expenses.

**As financial parenting is a very lengthy subject, will handle it separately.  

2. Moderate the debt levels:

40s is the time to ease out debt out of the books gradually; should ideally reach zero or near zero debt levels.

3. Investment decisions based on a Financial Plan:

Well laid financial plan should guide the investment decisions during this phase. The asset allocation pattern for investments (equity, fixed deposits, real estate, gold etc) should dictate the decisions and not impulsive decision making. The level of risk taking in investments should gradually decline during this phase.

4. Well planned retirement:

Though everyone's wish is to retire early and pursue our other interests, it's not the case with our incomes. We always wish our incomes not to retire. This is the phase to consolidate the retirement fund for which the plan should start in the 30's and be ready for payouts at a future date.

5. Planned other financial goals in a SMART way:

Our goals do not end only with our retirement; there are other goals as well which would involve our children, spouse and parents. This is the phase to consolidate those goals as well.

These goals should be Specific, Measurable, Attainable, Relevant and Time bound. In short the goals should be SMART.

 























6. Up to date Insurance cover:

This is a critical need during this stage, as 30s would have given phenomenal growth in incomes and careers. Its ideal and necessary to have life insurance up to date. For eg., If one is aged 45, earning 50 Las PA, the family's expectation from the person is to bring home 50 lacs every year till the next change in income. So the person in the present date should atleast have a life cover of 50 lacs * 10 times = 5 Crores to leave  to his family in his absence.

Earlier is not better, it's the best...

7. Creation of an Emergency fund:

With corporate careers getting more dynamic and uncertain, there may be several factors which can lead to early retirement, entrepreneurial ventures, geographical relocations etc. Such situations can come at a short notice and they need a special fund to take care of the sustenance to a reasonable extent without regular income. Plan for such a fund which can be handy during the rainy days.

- Gopalakrishnan V

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)