Why plan when none of my investment has gone wrong until today? By God grace, none of my work has stopped so why pay for financial planning?
We as Financial Planners also hear similar tunes when we speak about Financial Planning concept. And my inference is that people do not appreciate any kind of PLANNING as a matter of fact. Doing a thing in the most scattered way has its own pleasure. People know that we are talking in their favor but they avoid seeing a Financial Planner. They avoid financial discussions and even shun learning for which they have to pay nothing.
We covered few reasons in an earlier post. Here is the link.
These are 10 more reasons to procrastinate Financial Planning.
Why do people avoid a Financial Planner? Based on my interaction I am summarizing why people say no to Financial Planning. See if you are still in the trap of these excuses or have gone over them:
You do not understand Financial Planning:
You still are not aware of the Financial Planning. Although media is over it and web pages are full of it but still, since you had your mind diverted, you are not familiar with it. No issues here as you are “never late” if you have “not arrived”. Spare some quality time and get to know the concept. Speak to a professional who can clarify your doubts. There will be a lot of investors around you who invest and live stress-free as they have routed all their investment after planning.
You do not endorse the concept:
You are well aware of the concept but still, think this is not enough. The conviction has not reached the desired levels. Try to address your distrust over the concept. You may end highlight a reason which is mentioned in the below-mentioned points. We also advocate that conviction in the concept is the first most requirements. A Financial Planner can convince you but you need to be in sync with him as he will put you in the driving seat as you are the driver and he is simply the maker of that custom-made vehicle, which is called a Financial Plan.
You think Financial Planning is for Rich people:
Once I was talking to a friend who make RS 5 Lakh annually working for a Mutual Fund and he said “After all the budgeting and expenses, I save Rs 2000/- a month and this makes Rs 24000 a year. And, if I take your services around half of this amount will be your fees, so why will I pay Rs 12000/- to manage Rs 12000/-? What a checkmate explanation!! I simply answered that it is your misconception that you can save only Rs 2000/- a month. A Financial Planner is not a guardian of your already earned wealth. He is basically the “Creator” and “Augmenter” of wealth. Your present economic condition has nothing to do with engaging financial planning.
You feel you have already done it:
Your investment consists a life insurance cover and a sip. You have bought a bit of Gold on every dip in prices and have taken a home loan to avoid tax and invest in reality. You think this is what a diversified portfolio means. No friend, this is not financial planning. You are moving here with no goals. You have no end here and you do not what you are doing is enough or not. If someone is claiming that this is financial planning, he is misleading you. The Financial Planning is s comprehensive field covering a lot of aspects.
You believe only making investments is Financial Planning:
You invest a lot. Whatever comes, any insurance policy that is launched, a new mutual fund or any IPO that comes, you eagerly put some money into everything. Financial Planning is not only about investment planning alone. It deals other disciplines like risk management, insurance, estate, tax planning etc which are equally important. You need to take a correct guidance and then place the foot.
You think you are blessed hence you will not require Financial Planning:
Some of also think that luck is on your way and you do not require planning. Maybe you are counting the inheritance money that you might be getting or you are just a happy-go-lucky character who lives in each moment of life. For you, I would just say that you are just enjoying the cherry which is over the cake and forgetting the cake which might turn out to be sour. Hope you do realize this before the cake gets stale to eat while you were too busy with the toppings.
You think you can handle it on your own:
Some of you think that since you have Indian parents (in-laws as well) you can dig their money in case of emergency. Or you think that since your employer provides you a group insurance you do not require a medical cover. Financial Planning is not only about managing financial emergencies. It is planning so that emergency do not arise at all and for nature bound emergencies, you have a corpus to face them. So please come into the light and face the reality.
You think that you do not make that much, so as to seek a Financial Planner:
You think you have too little to manage that you do not require a Financial Planner. Honestly, you are thinking that paying fees to get organized is too much. It is not the concept but the intrinsic nature of being a miser, which is avoiding you to get a plan. First of all, how much money you currently save or have is not in criteria, since through financial planning you actually learn the art of saving and Investing this saving for a goal. Come out of this money-by-teeth attitude and spend on a thing which can help you build a life.
You are a compulsory procrastinator:
By habit, you are a non- starter. It takes time for you to initiate. You wait for other to start then you keep on postponing it till the last minute. You also fear of losing so you do not initiate at all, or start when it is an emergency. A lot of people has this strange thing that despite being convinced they make delays. In financial planning, we deal with a genie called “Power of Compounding” and this genie can do wonders if you give proper time to him. Time has a value and delays can be very painful.
You enjoy free lunches only:
Nerds make payments and smart ones enjoy the nature. You just enjoy freebies. You are wrong my friend. Maybe in another field of life, this might be true but in this field, you need to invest. Here you will find a lot of sharks with honey draped faces to make a prey out of you. Even a single wrong meeting, an advice or transaction may ruin you and future of your loved ones. It is best to engage a professional who can advise over the vested interest of product sellers and can synchronize your financial life. For this, you need to pay and over a period you will realize it was worth paying.
Financial Planning is a concept that takes care of entire investment process, starting from goal identification, risk-tolerance test, asset allocation, portfolio construction and monitoring the investments. Once you engage with a financial planner the need for financial planning exists each year and investors need to be careful to discontinue. You keep visiting the doctor for regular check-ups each year, don’t you? In a similar way, you need to keep visiting your planner.