Now you are prepared with the financial plan and monitoring well now what is the next step.
Next step in financial planing is to review financial plan !
Why to review financial plan :
There is no need to review the financial plan if your life is following your one time prepared financial plan But fortunately or unfortunately it is not true.
Fortunately : If there is a positive unexpected change in cash flow, eg. higher increase in salary than expected, unexpected cash inflow may be in the form of bonus or gift, or spouse starts working who was not working earlier etc.....
Unfortunately : Job loss, major accident resultant in to disability or death of breadwinner, unexpected nonnegotiable expenses etc......
So 99.99% of the times there is a dynamic change in the cash flow , it may be the portfolio had not given the return as per expectation or given more that expectation.
As well as there may be a change in the goals which we have planned earlier.
Review is the process of doing an entire financial planning once again.
What should be the periodicity of review ? :
As we believe there is no any slandered periodicity for review it should be at least once in a year.
But if there is a major change in the cash flow or goals or in the financial market the call of review should be taken.
The review can be initiated by client or can be by financial planner.
Benefits of review :
you are sure that you are on the right track again.
If major change is it gets absorbed and strategy is made to nullify the effect of this on the goals or if it is positive then to revamp the goals.
gives you to take immediate corrective actions to absorb the change effect.
Follow the steps given in the Financial planning - Basic rule series posts ,
i am sure it will help you in living your life in financially planned manner.
" All the best Enjoy the Life. "
Next step in financial planing is to review financial plan !
Why to review financial plan :
There is no need to review the financial plan if your life is following your one time prepared financial plan But fortunately or unfortunately it is not true.
Fortunately : If there is a positive unexpected change in cash flow, eg. higher increase in salary than expected, unexpected cash inflow may be in the form of bonus or gift, or spouse starts working who was not working earlier etc.....
Unfortunately : Job loss, major accident resultant in to disability or death of breadwinner, unexpected nonnegotiable expenses etc......
So 99.99% of the times there is a dynamic change in the cash flow , it may be the portfolio had not given the return as per expectation or given more that expectation.
As well as there may be a change in the goals which we have planned earlier.
Review is the process of doing an entire financial planning once again.
What should be the periodicity of review ? :
As we believe there is no any slandered periodicity for review it should be at least once in a year.
But if there is a major change in the cash flow or goals or in the financial market the call of review should be taken.
The review can be initiated by client or can be by financial planner.
Benefits of review :
you are sure that you are on the right track again.
If major change is it gets absorbed and strategy is made to nullify the effect of this on the goals or if it is positive then to revamp the goals.
gives you to take immediate corrective actions to absorb the change effect.
Follow the steps given in the Financial planning - Basic rule series posts ,
i am sure it will help you in living your life in financially planned manner.
" All the best Enjoy the Life. "
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