Financial Planning

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Contents
 Introduction
 Planning
 Financial Planning (FP)
 FP Pyramid
 FP Process
 FP Concepts
 FP Misconceptions
Introduction
Planning
Introduction
Planning

Planning means looking ahead and chalking out

future courses of action to be followed

Examples:
- Preparation for competitive exams
- Planning a vacation
Introduction
Financial Planning

Financial Planning is the process of meeting your

life goals through the proper management of your
finances.

Examples of goals:
- Buying a house
- Higher Education
Introduction
Financial Planning Pyramid

Wealth
Distribution
(Transfer what you have)

Wealth Creation
(Accumulate)

Wealth Protection
(Protect what you have) Start
Financial Planning Process

Data Collection Draft Plan

Goal setting Final Plan
Current Analysis Product Suggestions

Execution
Monitoring Follow ups
Follow ups
Query Solving
Financial Planning Concepts

a) Cash Flow Analysis (Current status)

b) Current Asset Allocation & Networth (Current Status)
c) Risk Profiling
d) Emergency Fund Analysis
e) Protection Planning
f) Investment Planning for Goals
g) Estate Planning
h) Tax Planning
i) Monitoring, Portfolio rebalancing & Review
Financial Planning Concepts
a) Cash Flow Analysis

Change
Sources Uses of in Cash
of Cash Cash Balanc
e
Financial Planning Concepts
b) Networth & Current Asset Allocation
Financial Planning Concepts
b) Current Asset Allocation Analysis

Debt
Gold
Real
Debt --Funds
FDs
Estate
Mutual NSC
Financial Planning Concepts
c) Risk Profiling

Aggressive
Moderate

Conservative

Risk
Averse
Financial Planning Concepts
d) Emergency Fund Analysis
 Financial Planning Concepts
d) Emergency Fund Analysis

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07/12/2023 www.onlinefinancialplanner.in
Financial Planning Concepts
e) Protection Planning (Life Insurance)

Quan
Incom Liabili
tum
Goals
e/ ties (Ex- (Ex-Kid’s of
Expen Home Educatio
n)
Life
Loan)
ses Insur
ance

-Income replacement Method

-Expenses replacement Method

Recommended Product:
Term Insurance
Financial Planning Concepts
e) Protection Planning (Non Life Insurance)

Make sure you have -

• Medical Insurance
• Property Insurance
• Motor Insurance
• Keyman Insurance
• Professional Liability Insurance
etc.,
Financial Planning Concepts
f) Investment Planning (IP) Process
Financial Planning Concepts
f) IP - Risk Vs Return Trade off - Products

Direct Equity
MF Balanced
Schemes,
MF Debt Property
Schemes,
Company FDs
Bank FDs,
Post office
Schemes,
Provident
Cash
Fund,Gold
ETFs
Financial Planning Concepts
f) IP - Risk Vs Return Trade off - Products
Financial Planning Concepts
f) Investment Planning (Time Value of Money)
Interest

Invest at highest interest

rate possible
Invest as (Best opportunity)
much as
possible &
as often as
possible Money

Time

Invest as long as possible

(Power of compounding)
Financial Planning Concepts
f) IP – Diversification & Asset Allocation
Financial Planning Concepts
g) Estate Planning

Estate planning involves making plans for the transfer

of your estate after death. Your estate is all the
property that you own. It can include cash, jewelry,
cars, houses, land, retirement, investment and savings
accounts, etc.

Nominations
Wills
Trust
Financial Planning Concepts
h) Tax Planning

Nothing is certain but death and taxes

Tax Saving Products :

Sec 80C: ELSS, Life Insurance, NSC,PPF,EPF,5 year FD,

Home loan Principal repayment, SrCSS,NPS

Sec 80 D: Mediclaim
Sec 24 (b): Home loan Interest
Financial Planning Concepts
i) Monitoring, Portfolio rebalancing & Review

Why they are required?

 Financial goals keep changing
 Changes in your economic profile
 Financial Market Conditions
Financial Planning Pyramid

T
A
X
Goals, Asset
P
L Allocation, Risk
A Profiling,
N Rebalancing
N Life insurance,Non-
I
N
Life insurance, Cash
G Flow Management,
Emergency Fund
Financial Planning
Common Misconceptions

- Financial Planning is for the Rich

- Insurance Planning is Financial Planning

- Tax Planning is Financial Planning

- I am young to think about Financial Planning

- Confuse Financial Planning with investing

 Sreekanth
CERTIFIED FINANCIAL PLANNER CM