It’s only in our old Hindi movies that in 5 minutes of nail-biting-popcorn-eating-time as the credits roll, does the five-year-old kiddo transform into an angry young hulk of an actor with a lot of monies by his side, accumulated either the right way or the wrong. In reality, this happens with Financial Planning. You can also start by following the financial planning process as discussed ahead.

No one tells us how it was done in the movies and whether there was a financial planner working away diligently behind the hero’s success which eventually fetches him a lot of monies, not to forget a girl and a long-lost mother.

In real life though, one definitely needs a financial planner who follows the financial planning process. Outlined below is probably what the actor of our Hindi movies was blissfully unaware of while he was courting girls and bashing up baddies but probably what his financial planner doled out behind the scenes.

When it comes to financial planning, any day, and any moment is the right time to start. Waiting for a lot of money to accumulate or to get to mid-age to start planning is a mistake investors often make. Financial planning can be done with as little as 50 rupees. Here are three rules investors can keep in mind for financial planning.

Basic Starting Steps for Financial Planning Process

1. Always set goals

Each individual will have some goal in his/her life. A single working professional could have a short-term goal of wanting to go for higher education. A parent could have his/her child’s college education and marriage as a long-term goal.

While we always have had goals, we have never realized it with the intention of planning for it. An investor who has set goals for himself has made the first important step towards financial planning.

It always makes sense to document in black and white one’s objectives in life – starting with what one wants to do the next year till the time one will survive.

2. Plan to save and invest for each goal

For each goal, investment in different/appropriate asset classes should be made systematically. While a lot of ordinary investors save money, very few of us actually invest.

It’s important to realize that money lying in a savings account gets run down by inflation earning negative returns.

Money should be invested in different asset classes. Each investor needs to do some homework on how to invest – this could be done by reading financial magazines, financial websites and talking to a fee-based financial planner.

Financial Planning Process

3. Monitor, make changes, improve and improvise

All investments made for each goal need to be monitored at least once a year, if not twice. Monitoring helps to see how the portfolio is performing – timely check helps the portfolio achieve its target year after year.

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If left unmonitored, one could wake up to a rude shock of not having met the target when the years run out. An intelligent investor will always take mitigation steps if the portfolio performs badly.

All three steps of the financial planning process, if performed with the help of a financial planner, can go a long way in making one wealthy.

This Article on Financial Planning Process is written by WealthWisher Team.