Polls says Younger Corporate Heads Have Not Set Their Goals

Most Singapore’s younger top executive, 50 and below, have not set their financial goals. According to Citibank’s Wealth Survey, out of the 103 interviewed head honchos, 57% have not set their financial goals. The respondents in the poll included Chief Executive Officers, managing directors, and board chairpersons.

While the top management positions in the country’s corporate market are occupied by people aged at least 40 and married with families, the survey indicated that despite having sufficiently generous salaries, the younger executives were reluctant to set their financial goals.

Interestingly, most of the interviewed executives believe adequate wealth translates to having enough to sustain their current comfy lifestyle beyond retirement, and ensuring that their families have a stable flow of income through various market conditions.

The survey also asked about wealth succession, planning and writing a will.

Young Adults Financial Capability

In 2016, a report by Tina Harrison, Caroline Marchant, and Jake Ansell, and published by the University of Edinburgh, charged that while 69% of young adults have financial goals,  most of them don’t have plans to reach them.

The report dubbed “Young Adults Financial Capability ” eluded that merely 37% of those who have financial goals have a plan to actualize their goals, while 36% have goals but no plans and 27% have neither goals nor plans. In its findings, young adults only make short-term plans and save to spend.

So, while the Citibank’s survey may revelations do not come as a surprise, may surprise you, it depicts the perception challenge that is rooted amongst the youthful members of the society. And as you can draw from the Young Adults Financial Capability reports, it is not limited to Singapore.

Most young executives are choosing to be dreamers and drifters, that is having goals but no plans to achieve the goals and neither having both.

Importance of Financial Goals

Like Rome, wealth is not built in a day. Wealth creation requires cumulative efforts and takes time. And if it takes time, it then requires you to start early and set up a long-term objective. It is why you need to set financial goals.

A person, who knows his or her financial goals, starts working towards accomplishing them. It is illogical to aim high, seeking complete economic independence and stability, yet we don’t have a roadmap towards achieving that goal.

We all want to own home, start a family and give our children the best life there is, amounting to financial independence and a decent living. But that takes time and is a long-term target. To reach there, you need to set smaller, manageable and modest financial goals first.

You must first know what you want to achieve, this way you will be in a position to create short-term targets on the road to accomplishing your objective. It also dictates how much you consume and how much you save. In layman terms, by setting up that financial goal, you are putting a value on them, which makes it easier for you to rearrange your finances.

The goals enable you to hatch a plan to achieve them. Savings approach will be excellent if you have modest goals. But you would need to come up with a different strategy if you have high ambitions. For example, owning a home would require you to increase your income while cutting down on expenses. You might need to invest in stocks or bonds or even consider a career shift, considering the time you need to raise a specific amount.

You are never too young for it, now is the right time to start financial planning. The process can be a long and tedious process, the very reason why you need to start early. Financial goals help you stay focused, and it is the very first step if you want a decent life that goes beyond retirement.

How Not To Let The Economy Affect Your Financial Status?

,

The individual financial status of the nation builds an economy; it is the per capital income of the people in the country which is one of the key factors to judge whether the economy is progressing or drowning in a financial crisis. Similarly, the economy also affects the financial status of an individual as there are various financial and other aspects which are determined by the economy as a whole. But as the breadwinner of the family you would want your family to be secure even when the economy is going through turmoil, won’t you? This is a natural human instinct to protect his or her family in the time of crisis and to do that, you need to plan your finance in such a way that it gets affected minimally by the economic ups and downs.

There are certain aspects of the economy and you as an individual need to keep those elements in mind to plan your finance properly. Firstly, inflation plays a significant role in determining the economic condition and thus your financial status. When the prices of the products rise on the whole, and the currency value diminishes, it is termed as inflation and to cope with this; you need to have substantial investments which should overdo the inflation rate and provide you with interest which you can maintain your financial status. In Singapore, the current inflation rate is around 0.6% which has increased from earlier month, so you might be worrying about your consumption as inflation affects it the most.

To hedge the risk of inflation, you need to invest in gold and other commodities as prices of these items are less affected by inflation in the market. Moreover, it has been observed that gold is a safe investment in most of the situation. The next you can do is to invest in the indexes like S&P500 as the market return is always higher than the rate of inflation in your country. Insurances play a significant role in cutting down your expenses in the time of inflation as well. When there is inflation in the market, the prices of health and medical treatments as well as education which are the primary requirements beside food and consumer durables rises. You as the head of the family and the bread winner wouldn’t want to compromise on your family’s health and your child’s education, isn’t it? So, if you buy insurance which you can use at the time of medical emergency or the child education insurance for your child’s higher studies, you would be paying less than the market in reality as you had paid the premium earlier when there was no inflation or the rate of inflation was lower.

Another factor is interest rate which is also a key driver of your financial status and it highly correlated with the economic condition. The government and the central bank keep on changing the interest rate due to monetary and fiscal policies. This interest rate up and down affects your savings and investments, to keep your net worth intact, you need to find more stable assets to invest. Though interest adjustments influence the market as a whole but investing in insurances is advantageous in this case. As the sum assured for the policy you would buy is fixed, interest rate won’t affect it much. For example, if you have saved and invested in fixed deposits, with the interest rates going down, your investment would lose value, but it won’t affect your investments in the insurance. You would get the exact claim settlement amount when your insurance policy matures.

There are various other economic factors which affect the financial status of an individual, but if you analyze the different financial instruments, there are many to offset the economy’s effect on your financial situation and aspirations.

Overall Development of US Economy In The Last Five Years

Despite the global market turmoil, US economy is still the largest economy which has the power to control other nation’s businesses and trades. But due to the down time in the world economy, the GDP is lower than expected. The economy grew at 2% on an average in the last five years on YOY basis. The unexpected election of Donald Trump as the president of the nation has already shaken the whole world, and it is giving tough time to the people anticipating how this government can help in improving the condition of the businesses and other economic factors in the country.

Though the last quarter witnessed positivity in the labor market with the new set of wages and payroll, the shortage of workers with the required skills is still there in every sector which is a shortcoming in the way of growth of the economy.  The consumer spending has increased again which is adding to the growth of this year in the Q2, and the inflation is decreasing which is a boon for the economy as well.

The population of the nation grew from 314 million in 2012 to 323 million till last year, 2016. The average income or the per capital income was $51,386 in the year 2012 which is now $57,436 in last year’s survey which is a good sign for the economy and its people.

The GDP grew from $16,155 billion to $18,569 billion in 5 years with an annual variation of 2.2% in 2012 which fell to 1.7% in 2013. Then, in 2014-15 it increased to 2.6%, but in 2016, it again dropped to 1.6%. Accordingly, the domestic demand also decreased to 1.4% in 2013 from 2.1% in 2012 and again sharply rose to 3.2% in 2015. However, due to the political turmoil and global issues in the businesses front, it fell to 1.7% in last year.

US economy has always been the consumption based economy, but the crisis in 2008 took away the faith of the people from the government.They started to consume less, so in 2012 and 2013; the consumption only grew by 1.5% which again took a flight to 2.9% and 3.2% in the years 2014 and 2015 but again in last year it fell to 2.7%.

The import-export industry has been affected the most in last five years. The export of the nation fell from a high of 3.4% increases in 2012 on a YOY basis to 0.4% in 2016 which set many shipping companies to get locked out, and it is a big blow to the economic situation. The import industry just slashed down to a half of 2.2% increase to 1.1% in the last year from five years back.

The bigger blow has been witnessed in the investment industry when 0.7% replaced the growth of 9.8% in 2012 to 2016. It dropped drastically high from 9.8% to 5% in the next year that is in 2013 and then 5.5% increase in 2014 which was followed by 4% growth in 2015 before it was then got slashed down to 0.7% in last year.

On the positive front, the unemployment rate decreased from 8.7% in 2012 to 4.9% in last year which reflects that there is job creation in the economy. The fiscal deficit fell from 6.7% of the GDP to 3.2% in the last year which is another positive side of the economy which shows that it is now careful about its policies.

The inflation rate or the CPI has also been decreasing over the last five years. It was 2.1% in 2012 which is now at 1.3%. US economy shows that it still has the foothold in the world as the leader though there are particular concern about its government and the economic conditions.

How Is The UK Growing After Brexit?

Brexit in the mid of 2016 was a significant blow to the world from the UK government as it separated itself from the European Union. The whole economy has been stirred because of this decision and not only UK and EU economies, but the nations across the globe were paused for that day.

It was highly anticipated that UK economy might slow down after it leaves EU, but on the contrary, it grew more than the previous year in the last quarter of the 2016-17. The Office for National Statistics or ONS in the UK reported an increase of 0.7% in the GDP which was earlier 0.6% and this shows how positively Brexit has affected the UK.

But Brexit doesn’t only bring happiness as there are downsides of the decision as well. The business environment got little fragile due to the uncertainty of the government and its decision and thus, the investments in businesses fell by 1% against the same period last year.

The service sector of UK suffered a lot in last few months where it dropped to the bottom especially when it hit the low in February which was a five-month low. The forecast for the growth of the UK has also been changed from 1.4% to 2% which is a huge difference, but it is anticipated that the economy will grow by 1.6% this year.

The major blow came in the form of the currency devaluation as the pound fell 15% against the dollar and 12% against Euro which is a massive decline in the recent past. Though the drop in the price of Pound helped the exporters of the country to sell more products to the foreign nation, which in turn added to the growth of the economy, the importers and the people going abroad faced trouble due to the falling currency of UK.

Though the currency has weakened against US dollar and Euro, the faith of the investors in the currency is yet to fade away. The stock market players also responded positively to the drop in currencies and reaped a profit. The FTSE 100 increased 16% from the evening of the announcement of the news of referendum.

Since the MNCs profit are calculated in foreign currencies, the benefits of those companies got inflated in the UK and thus there is this rise in the index which helped the share market to grow a bit.

The banking sector pushed the economy upward right after it left the EU as it was anticipated that the economy would get into the gloomy state but the rate cut for borrowing money boost the economy as it increased the investment. The Bank of England slashed down the 0.5% interest rate to 0.25% in last year which helped the growth in different sectors of the economies.

The area of housing or the real estate industry grew by almost 5% in last year and it accelerated more after the Brexit. But on the other hand, the increasing price of the houses has been slowed down after this Brexit event and it grew by 2% in the last quarter of 2016-17.

Brexit influence both imports and exports as there is the change of price of the currency. The trade deficit didn’t change which is a positive thing and the export in last year surpassed the imports which are a big success of the Brexit.

The employment rate has been on the rise for past five years in a row after the global crisis scenario. The pay structure has been improved which 2.3% has raised it.

Since the reaction of Brexit is various, the inflation of the economy raises. It increased to 1.8% from the previous of 1.6%. The impact of Brexit on the UK government is a mixture of both positive and negative aspects. However, the overall economy has been on a rise since it left EU.

 

How Will the US Economy Grow Under Trump?

In the starting of 2017, the US economy showed the signs of a slow growth which has been observed since the final years of Obama’s rule. The election of Trump as the president of the US has shaken the entire nation as well as the world at large and every sector got affected by this decision. The growth of the US economy has been sluggish for a few years now, but under the rule of Trump, it is expected to rise in sometime though the analysts expect nothing phenomenal.

The Federal Reserve of Atlanta had predicted an annual rise of the 0.5% in the growth of the US economy in the first quarter of the year, 2017 which is contradicted by the economists working for the private firms as they say the growth will be around 1.1%.

The growth promised by Trump in his voting campaign does not match with the forecast of the Federal Reserve of the country as they predict it to be somewhere around 2% where as Trump promised to make it 4% and beyond on an annual parameter. Fed predicts this 2% growth to remain stagnant for the next few years to come which is another challenge for the Trump’s administration. The last time when America witnessed such a massive growth of 4% per annum was in 90’s but after the great recession of 2008, it never crossed the margin of 2%.

The factors which are affecting the growth of the nation are the condition of the global businesses and trades which are much sluggish and due to the appreciation of the dollar, other countries are decreasing their imports from US which is hitting very hard on the US economy.

The economy has become very worried about spending and thus the production in turn, the businesses are getting hugely affected due to the decreased demand. But the sudden election of a businessman in the president’s chair has boosted up the expectation of the nation and analysts are predicting a head turning situation shortly. But, the real growth in the people’s consumption and investments is yet to rise which is the key drivers of the economic growth.

The economists and the experts suggest that there are positive outlooks; such as the general price decrease for the regular utility products like cooking gas, food items and so on. The unemployment ratio has not broadened up and it is still lying at 4.5% which is also slightly lower than the previous term. There is much growth in the employment after Trump’s election and one of the most important changes that have taken place is the rise in the wages of the workers.

The infrastructure sector takes much growth as well. The roads, railways and the bridges are getting improved after Trump has taken charge. It is not only going to pace up the life of the American commuters on a daily basis but generating many employment options for the regular workers. Another way this improved infrastructure will help is by increasing the time of productive work. You need less time to reach your office, and thus you will be less tired and have more time for your job.

Moreover, the sluggish growth of the US economy which has been witnessed for long now is not because of Trump’s administration. The laws and policies which this present government has passed is yet to be fully active and thus the actual growth can be observed a year later from now.

Trump’s administration is working on various economic growth avenues like the tax exemption for business growth and better infrastructure which is going to affect as well as boost the growth of the economy in near future as anticipated by the experts.

 

Emerging Businesses In Singapore

,

Singapore is a nation of opportunities and the government’s support for businesses and trade in the country is making it a world leader. The ease of setting up and running a business in Singapore is comparatively very high than any other countries in the world as the government has various incentives for the entrepreneurs as well as the legalities are very few. Even the tax structure favors all the businesses and trade in the country. This business-friendly state has a workforce from different parts of the world beside the native people who are dedicated and highly talented, and that adds to the progress of the country. There are various businesses and industries which have great prospects in the coming years to boom and add significant value to the country’s growth.

The most crucial sector: Health Care (Med- Tech)

Health care is one of the most important industries in the country is now expected to rise at above 10 percent. The rising number of aged people across the continent is adding to the business especially in the med-tech industry. Med-Tech or medical facilities which involve various technologies is now on rising as everyday new technologies are getting developed to make the lives of the patients way better.

More than hundreds of SMEs dealing in med-tech business together have grown from $1.5 billion to $5.5 billion regarding output in just 14 years (2000-2014). In the manufacturing sector of the country, this biotech industry shows very bright prospect of growth. It has already shown 65% of output growth in 2015.

Singapore is one of the entry points for investing in Asian market also boosts the growth of the Med-Tech industry, and there are lots of other facilities like secure funding for the new entrepreneurs who want to invest in the health care sector.

Fin-tech is the new Finance sector

Finance and Technology when combined, the results are unbeatable opportunities. The financial sector in Singapore is already one of the top most industries making a significant input in the GDP that is almost close to 1/3rd of the total GDP. Now, with the new financial technologies, enormous opportunities are coming into existence. The MAS has promised to provide $225 million for the coming five years for the growth of the Fintech sector.

Education sector

Being one of the vital areas not only in the business but also in the social arena, an Educational sector in Singapore is doing well from the previous year. The citizens of Singapore who are aged 25 or above receive $500 as credit for continuing their professional studies and training under the initiative of the government of Singapore – SkillsFuture.

This initiative is going to increase the business of the vocational training institutes and other professional training institutes for the executives. The Singaporean government has also committed to remit $1 billion till the year 2020 for the people who are in continuing educational programs. New institutes are beginning to seize this tremendous opportunity and add to the business growth of Singapore.

Space Industry

Space and satellite industry in Singapore is expected to grow at a rapid pace after the restructuring of the economy. There are tremendous growth prospects identified in this sector. More than thousands of professionals have been employed in this industry, and it will grow further as expected. The new satellite launches are making the communication easier, and thus new entrepreneurs are also taking an interest in investing in this sector.

IT industry

IT or Information Technology industry has always been one of the top business industries in Singapore with so many well established IT companies. The cloud computing markets are anticipated to grow close to $1billion by this year. The government of Singapore, in 2015, launched ICT tenders worth $2.2 billion for the IT infrastructure growth, digital and web services beside data services.

Creative Industry

Last but not the least is the sector of creative minds in Singapore who is also expected to deliver huge businesses in the field of animation, creative agencies, sports, lifestyle, game development and industrial designs. With the help from the government, these sectors have tremendous growth prospects, and new entrepreneurs are investing in these businesses.

How Is Financial Sector Growing In Singapore? – Challenges & Opportunities Ahead

Out of the 2 percent growth in the previous financial year, the financial sector itself chipped in 1/3rd of the growth. In Singapore, financial sector plays such an important role that the government and its people cannot afford to lose its presence. Though this market is demanding as well as highly risky, the pride and profit margins make people look into the newer opportunities amidst the dark conditions.

The same thing happened when in the previous year, there were layoffs from the major banks and the financial institutes due to unfavorable business conditions. But the headwind passes off very quickly, and the market gained its momentum back in few months. But there are many more challenges which the financial market is facing, but the hopes of the investors and the employees are too high for this market to make it fall short.

Growth in last few years

The financial market is mainly comprised of the capital market and the insurance sector along with the banking industry. The capital market has been sluggish for last 2-3 years which brought down the growth of the financial market as a whole. It gained back its momentum last year with some of the IPOs and other factors like proper business perspective and FDIs. But the banking sector is still running slow which is adversely affecting the growth.

In 2009, post the great financial crisis of 2008, the financial sector of Singapore which is hugely affected by the US market was completely slashed down, and the growth rate was negative. Then in 2010, it took off again and almost touched 12% in a year post that it again started declining and again neared zero percent. In 2013, it reached 11.5% on the contrary to the previous year’s zero percent, and in last two years, it is around 4-5% with the growth of the “fin-tech” companies that are financial companies running on high-level technologies.

The debt market of Singapore is also becoming strong as the OTC trade volume surpassed $400 billion in 2015-16. Singapore is the third largest market for foreign exchange trading.

What are the shortcomings?

The Singapore financial market faces great competition from the financial market of Hong Kong as the latter has better connections with the World biggest economy – China.  Hong Kong with a better prospect in the investment banking sector especially in the M&A of corporate sectors has the upper hand.  

The market of Hong Kong has much more to it, and that is what threatens the local financial market of Singapore which has a limited number of financial market participants to explore the depth of the market. Though the financial market has increased, it is still lagging behind the growth it has witnessed in the year 2013-14. The last year’s average per day turnover in the stock market was $1.1 billion which was almost 20% drop from the turnover of 2013-14.

Moreover, due to the Trump rule in the US, institutional investors are feeling safe to invest money in Hong Kong than in Singapore which is taking away the shine from the Singaporean markets. The growth prospect of Singapore is very much linked to the way the Americans perceive their economy.

Another challenge which is Fintech companies which are viewed as a greater means of expanding the financial business but analysts predicts that these companies can destroy the traditional financial market without making much improvement for the new and thus Singapore’s economy might land in greater troubles within next few decades.

Opportunities

Amidst all these challenges, the financial market of Singapore still stands an excellent chance because the Asians are growing wealthier and they are now not restricted to bank FDs and the savings but also trying to explore the markets in bigger and deeper way. If this process continues, then the banks and the financial institutes will freely take a chance to expand their businesses in Singapore. This will increase the opportunities in the market of Singapore.

 

What’s in Store for Singapore in 2017? – Growth Prospects of the Economy

The last quarter of 2016-17 influenced the economist to be high on Singapore’s growth outlook for this year, 2017. Due to significant demand from the foreign countries of the Singaporean products and services, the analysts and the economists are expecting better GDP in 2017 as well.

Though earlier, the forecast of the growth in 2017 was marked up to 1.5 percent by Monetary Authority of Singapore (MAS) and central bank due to the high FDI and demand across the globe, the expectation has been raised up to 2.3 percent.

In the last quarter of 2016-17, due to exceptional rise in the manufacturing sector of Singapore which is close to 12 percent from the previous year, the GDP went up to 2.9 percent. This is the primary reason for the economist to support the higher expectation of growth this year as well.

Singapore Economy is quite sensitive

In 2015-16, the overall expansion of the country was 1.9 percent but due to the path-breaking 2.9 percent increase in the final three months, the entire year’s growth was marked at 2 percent in 2016-17. The official forecast of the MAS about the growth of the economy is within 1-3 percent. MAS has provided this range as Singapore is an economy which is significantly affected by the world economy. The small yet very open economy is susceptible to the adversities of the trades taking place across the world.

The economy witnessed a slowdown in 2014-15 and 2015-16 due to the adverse business and slowdown in the global economy. The foreign demand dropped slashing down the growth of the Singapore economy.

Opportunities

The economies across the world are showing positive signs for the betterment of trades and businesses which motivated the economy of Singapore to rise again. The export of non-oil products from Singapore is expected to grow by 6.1 percent in 2017 which is higher than what was forecasted in the previous survey.

According to the Standard Chartered Bank’s economists, the temporary factors like the price hike in the oil and chips, high demand of the electronic products and services are going to raise the export of Singapore in 2017 which will add up to the economy’s expansion.

There is a high expectation from the electronics industry as well as from the transportation industry which will boost the growth of the economy besides other industries like storage and oil.

 Challenges

The challenges that the Singapore government and the traders will face is the political drawback due to the Trump rule in the US. There is a slowdown after Trump took over the US and it is adversely affecting Singapore. The restrictive trade policy of the US is slowing down the Singapore’s trades and businesses. This is why the economists are not entirely sure about the expansion rate of the economy though they are high on it.

Another factor is that the irregular forces like price hike and high demand are increasing the export, but they are not going to be there for long term. Economists are predicting that these forces will play in the economy for the first half of 2017 and will eventually fade away in the second half of the year.

The IT sector along with the communication industry is expected to be resilient which won’t add to the growth much. The educational sector, as well as the area of health, is also going to be slow this year.

In Q1 2017, the construction industry shrunk by 1.4 percent which negatively affected the expansion. The building sector has been declining for two quarters due to the slowdown in the construction projects handled by the private sector.

There is a strong headwind of growth expansion on the Singaporean economy, but there are global challenges as well. Analysis are high as the wind is changing its course from the last quarter in the previous year and hopefully 2017 will be a better year for Singapore.

How Should One Prioritize His/Her Financial Expenses?

Financial planning should be started early in life

As soon as we finish our studies, we look out for available jobs in the market matching our skills and preferences. Some of us also start up new business ventures or join family business to get established in life and start earning money. Earning is important as it gives the financial independence and the ability to make a living that is much-needed for every individual. During the initial years of the professional career, most of us tend to spend more than we earn as it is the phase when we are still in our early 20s and are less experienced in life. We love to party, shop, travel and enjoy with friends and hardly save anything for future. However, this is not a good practice and every individual should start saving from the day they get their first pay cheque. The financial advisors are the experts who can help you out to plan and prioritise your financial expenses.

Expenses and investments through different life stages 

Once we are settled in our job, it is the time to get settled in personal life as well. If you have a secured job with a steady income that is sufficient for a family to survive then it is the right time to get married and start a family. The first and most important expense is related to buying a new home to live with your family. Then you will definitely need a vehicle for transportation. You will need funds to go for vacations, shopping and eating outs. There are numerous expenses like the electricity bills, phone bills, fuel expenses, grocery so on and so forth. Being a responsible resident, you need to pay for the taxes and after all these expenses you will need to have some savings for your future. Loans are the best option to buy a property or a vehicle. For this purpose, you should seek advice from the best financial planners and advisors in your locality that will analyse your expenses and make a financial plan matching your requirements. They will guide you on how to secure your family members financially and where exactly you need to invest to get maximum returns during an emergency.

The most important investment that every individual should make early in their lives is the medical insurance. Medical emergencies can occur anytime and these investments will ensure that all your medical expenses are paid off. If you are a proud parent then you should take up a child plan to secure your child’s future that will fund his expenses for higher education. Also, after everything else, you must invest in a retirement plan that will take care of you and your spouse during old age so you don’t have to depend on anyone financially. There are various schemes and options to save and grow your money for a secured future. You can plan all these savings and investments in a structured manner with the expert advice by the experienced financial advisors.

About Financial Planning

,

Investments and Financial Planning

Investment needs to be a planned affair, and if the investment plans are not well analyzed, the investor might run into major losses. Investing in insurance products or into real estate or in any kind of financial platforms which helps generate some form of revenue should be thoroughly assessed. Financial Planning is the series of plans that the investor wants to implement over a certain period of time to achieve his target in the financial aspect.

Aspects of Financial Plan

In a financial plan, an investor enumerates the goals of his or her life. He lists down the factors which he or she needs to take extra care of and the amount required for important life events.

An investor’s financial plan must include:

  • Investment plan: This includes the risks and the return of the investments made by the investor in certain asset classes or the ones he wants to invest into. If the investor wants to diversify his investment, then the plan will take into account the correlation between those asset’s classes and will gauge the return and the risks associated with each of the asset class and accordingly analyze the final risk-return figure. It is important to know the investor’s preference, risk appetite, and the risk tolerance level when choosing the asset classes. It is also important to take into account the net worth of the person or the investor to properly determine the financial aspirations.
  • Risk Management and Protection against Financial Loss: One of the key elements of the financial planning is to provide protection to the family members during difficult situations. Risk management covers a range of insurance products which are necessary for an investor’s family. It includes life insurance or death coverage, disability coverage, property and personal liability coverage etc.
  • Investments for Long Term: Keeping in mind the higher education of your child or their marriage or might be buying a property, you can invest for a longer Keep track of your investments by make periodical review on their performance.
  • Cash Flow and Tax Plan: This is important as it provides the knowledge of the income that is earned by the investor and about the amount of tax he or she needs to pay every year.
  • Planning for Retirement: People wants a secure retired life and that’s why most of the people saves a portion of their remuneration and earning at regular intervals by using various financial instruments and other assets. It is important to incorporate retirement goals in the financial plan otherwise the financial planning would be incomplete.

Why is financial Planning important to an investor?

Planning is the first step towards achieving one’s goal irrespective of the nature of the goal. So, when an investor invests, he or she has the goal of reaping profits out of the investment. But if he or she is unaware of the purpose for which they will require the money or when they will require the money, they might end up investing in the wrong asset class. Financial Planning helps the investor in:

  • Investing in the right direction with clear knowledge of the investment.
  • Measuring the risk appetite of the investors and analyze investments suitable for him or her so that they don’t end up losing all their savings.
  • Investing in a systemic manner which can accumulate capital over the years to come.
  • Planning for the secure
  • An emergency situation can be handled with ease if the profits of the investments can be reaped at that point of time.

Financial Planning is the basic requirement of right investments and helps in reaping profit at the right place and at the right time when the investor needs it the most. When it comes to helping an investor to plan his/her investment, there is no one better than a Financial Consultant.