Amazines Free Article Archive
www.amazines.com - Tuesday, December 18, 2018
Read about the most recent changes and happenings at Amazines.com
Log into your account or register as a new author. Start submitting your articles right now!
Search our database for articles.
Subscribe to receive articles emailed straight to your email account. You may choose multiple categories.
View our newest articles submitted by our authors.
View our most top rated articles rated by our visitors.
* Please note that this is NOT the ARTICLE manager
Add a new EZINE, or manage your EZINE submission.
Add fresh, free web content to your site such as newest articles, web tools, and quotes with a single piece of code!
Home What's New? Submit/Manage Articles Latest Posts Top Rated Article Search
Google
Subscriptions Manage Ezines
CATEGORIES
 Article Archive
 Advertising (133273)
 Advice (160775)
 Affiliate Programs (34733)
 Art and Culture (73644)
 Automotive (145552)
 Blogs (75006)
 Boating (9841)
 Books (17129)
 Buddhism (4122)
 Business (1328036)
 Business News (426289)
 Business Opportunities (366242)
 Camping (10949)
 Career (72751)
 Christianity (15837)
 Collecting (11636)
 Communication (115049)
 Computers (241942)
 Construction (38971)
 Consumer (49646)
 Cooking (17058)
 Copywriting (6567)
 Crafts (18210)
 Cuisine (7535)
 Current Affairs (20373)
 Dating (45770)
 EBooks (19684)
 E-Commerce (48190)
 Education (185126)
 Electronics (83432)
 Email (6389)
 Entertainment (159789)
 Environment (28928)
 Ezine (3038)
 Ezine Publishing (5443)
 Ezine Sites (1552)
 Family & Parenting (110882)
 Fashion & Cosmetics (196374)
 Female Entrepreneurs (11840)
 Feng Shui (130)
 Finance & Investment (310216)
 Fitness (105827)
 Food & Beverages (62820)
 Free Web Resources (7936)
 Gambling (30211)
 Gardening (25064)
 Government (10517)
 Health (629057)
 Hinduism (2163)
 Hobbies (44026)
 Home Business (91542)
 Home Improvement (251226)
 Home Repair (46099)
 Humor (4806)
 Import - Export (5444)
 Insurance (45093)
 Interior Design (29541)
 International Property (3485)
 Internet (190953)
 Internet Marketing (146283)
 Investment (22822)
 Islam (1168)
 Judaism (1357)
 Law (80450)
 Link Popularity (4592)
 Manufacturing (20810)
 Marketing (98729)
 MLM (14136)
 Motivation (18211)
 Music (26997)
 New to the Internet (9475)
 Non-Profit Organizations (4048)
 Online Shopping (129604)
 Organizing (7797)
 Party Ideas (11854)
 Pets (38083)
 Poetry (2234)
 Press Release (12667)
 Public Speaking (5620)
 Publishing (7522)
 Quotes (2407)
 Real Estate (126602)
 Recreation & Leisure (95239)
 Relationships (87434)
 Research (16153)
 Sales (80293)
 Science & Technology (110127)
 Search Engines (23445)
 Self Improvement (153071)
 Seniors (6221)
 Sexuality (35939)
 Small Business (49277)
 Software (82922)
 Spiritual (23461)
 Sports (116459)
 Tax (7658)
 Telecommuting (34074)
 Travel & Tourism (306927)
 UK Property Investment (3117)
 Video Games (13420)
 Web Traffic (11723)
 Website Design (56785)
 Website Promotion (36556)
 World News (1000+)
 Writing (35758)
Author Spotlight
ANISH SAH

My Name is Anish Sah, I am an Internet Marketing and SEO Expert, Social Media Guru and young Entrepr...more
PHILIP MODY

A. BOOK PUBLISHED: Title of Book Publisher ISBN & Year Status of Publisher 1. Role of Ginger...more
ALFRED MEARS

Former English Teacher; Musician (20+ years); Freelance Writer ...more
MILECIA MCG

Hey there. I've been programming in some way, shape, or form for the past decade. My background is i...more
R JONES

Free Lance writer on a number of subjects. Retired from worldwide service in the US Marines, and ha...more


How to construct a financial plan with a strong foundation? by Ramalingam K






Article Author Biography
How to construct a financial plan with a strong foundation? by
Article Posted: 09/19/2017
Article Views: 217
Articles Written: 101
Word Count: 993
Article Votes: 0
AddThis Social Bookmark Button

How to construct a financial plan with a strong foundation?


 
Finance & Investment
The motive behind creating a financial plan is to have a route map to achieve your financial goals. A plan that tells you what are all your realistic goals and what are all your unrealistic dreams. A plan that tells where you will be financially 5 years from now, 10 years from now and 20 years from now.

A strong foundation is important for a long lasting construction. Similarly when we are constructing a financial plan there are some basic things to be given more attention.

Current Savings and Investments:

We need to take into account what are all the current savings and investments you have. It could be cash in hand, cash at bank, investments in financial assets, real estate investments and other investments. However, this will not include assets which we are keeping it or maintaining for our personal use like personal jewels, self occupied house, car etc. This exercise of assessing our current savings and investments is done in order to understand and realize “where do we now stand financially?”

Future Savings Potential:

We need to take into account what is your family’s current income and at what rate this income is expected to go up till your assumed age of retirement. This growth rate of your income can be guessed to certain extend by considering your past increment experience and your industry standards. Based on this predicted growth rate of income, we need to project your income till your assumed age of retirement.

Also we need to project your expenses. Take what are all your expenses and project these expenses till your assumed age of retirement. Expenses can go up because of 2 reasons. One is inflation and the other is change in lifestyle and life stage.

Once you project your income and expenses till your assumed age of retirement, then you will be able to assess how much you will be able to save year after year till retirement. Identifying your saving potential helps us determine where we can reach financially and how fast we can reach there.

Future Financial commitments:

Other important foundation work is to list down the future financial commitments for goals. First you need to list down the financial goals to be achieved on a timeline. That is you may want to buy a car 3 years from now, you may want to buy a property 5 years from now, you may need to meet your first kid’s higher education 10 years from now, second kid’s education 13 years from now, you want to retire 20 years from now and in between you would like to go for a few international vacations…

Once you list down the goals on the timeline, we need to find out the approximate future value of these goals. Finding out the future value of the goals is little difficult but possible if we follow a few simple steps. Try to figure out what would be the present value of these goals if you were to meet these goals today. That is, what would be the value of the goals in today’s cost of living? Then project this present value with inflation to find out the approximate future value of these goals.

Say one of your goals is to buy a property at the end of 5 years from now. Visualise and get more details about this goal. In which location you will be likely to buy the property? What would be the size and other specifications of the property? Once you have found out answers for these kinds of questions then you need to find out what would be the cost of such property now. As you have arrived at the present value of your goal, you need to project this present value of the property with assumed inflation rate for 5 years and you will be getting the approximate future value. Say the present value of the property is 70 lakhs, then the inflated value end of 5 years may be 1 crore.

We need to do this exercise for each and every goal. End of this exercise, you will have what are all the goals you are planning to achieve, when you are achieving each one of them and what would be the approximate future value of these goals.

Viability Check:

Now we need to check, with the current savings and future saving potential, is it possible for you to achieve all the goals. If it is possible, we can go ahead and create a financial plan. If it is not possible, then what is the alternative? The alternative may be to retire at 58 instead of 55, to buy the car after 5 years instead of 3 years or to buy the property worth 50 lakhs instead of 70 lakhs.

We need to create a few alternative scenarios which are achievable. After going through these alternative scenarios, depending on your priority you need to choose a scenario which suits best for you. You may like to choose a particular scenario and fine tune it. Like this we need to finalise a scenario which is achievable by a financial plan as well as acceptable to you.

Once you finalise this scenario, based on that a sound financial plan will be created. This viability check makes you understand the shortfall or gap between your realities and dreams. This makes you keep realistic expectations in your financial goals.

You can’t ignore these basic things in creating a financial plan. If these basics are ignored then your financial plan will become weak. You need to pay enough attention to these basic things which makes the foundation very strong and the financial plan very sound.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.

Related Articles - financial goal, finance,







Email this Article to a Friend!

Receive Articles like this one direct to your email box!
Subscribe for free today!

 Rate This Article  
Completely useless, should be removed from directory.
Minimal useful information.
Decent and informative.
Great article, very informative and helpful.
A 'Must Read'.

 

Do you Agree or Disagree? Have a Comment? POST IT!

 Reader Opinions 
Submit your comments and they will be posted here.
Make this comment or to the Author only:
Name:
Email:
*Your email will NOT be posted. This is for administrative purposes only.
Comments: *Your Comments WILL be posted to the AUTHOR ONLY if you select PRIVATE and to this PUBLIC PAGE if you select PUBLIC, so write accordingly.
 
Please enter the code in the image:



 Author Login 
LOGIN
Register for Author Account

 

Advertiser Login

 

ADVERTISE HERE NOW!
   Limited Time $60 Offer!
   90  Days-1.5 Million Views  

 

Great Paranormal Romance

World News


LAURA JEEVES

At LeadGenerators, we specialise in content-led Online Marketing Strategies for our clients in the t...more
STEPHEN BYE

Steve Bye is currently a fiction writer, who published his first novel, ‘Looking Forward Through The...more
STEVERT MCKENZIE

Stevert Mckenzie, Travel Enthusiast. ...more
GENE MYERS

Author of four books and two screenplays; frequent magazine contributor. I have four other books "in...more
SUSAN FRIESEN

Susan Friesen, founder of the award-winning web development and digital marketing firm eVision Media...more
NANETTE VICTORIA

Nanette Victoria Spiritual Coach and Intuitive Guide (over 27 years experience) Spiritual Ministe...more
MICHAEL BRESCIANI

Rev Bresciani is the author of two Christian books. One book is an important and concisely written b...more
JAVIER VBOIX

For the time being just a newbie in the Insurance Industry but a quick learner, soon-to-be expert Ja...more
SANDY FISCHEL

Sandy Fischel is the marketing director at And Above All YOGA, a wholly owned division of The Fische...more
CHRISTOPHER EVANS

Christopher is based in the U.K. and is the author and founder of Critical Eye. ...more

HomeLinksAbout UsContact UsTerms of UsePrivacy PolicyFAQResources
Copyright © 2018, All rights reserved.
Some pages may contain portions of text relating to certain topics obtained from wikipedia.org under the GNU FDL license