How to Get Yourself A Financial Plan

Posted on February 13, 2010 by Ranjan — 6 Comments ↓

Background:

I always believe that life unfolds itself, and with utter disregard to your plans to achieve this or that. But I guess, Dwight D Eisenhower is more articulate. Read on.

Plans are worthless, but planning is everything. There is a very great distinction because when you are planning for an emergency you must start with this one thing: the very definition of ‘emergency’ is that it is unexpected, therefore it is not going to happen the way you are planning. (Eisenhower quotes)

Financial Plan

Now, the financial services sector in India is a hot area and I’ve written about it before. Link, Link2.

I have written about InvestmentYogi and how their goal is to promote a holistic financial planning approach to investing and managing wealth.

I recently came across their online Financial Planning application and was immediately enthused to utilize the tool. After logging in, I found the user interface very cool and user friendly. Take a look:

There is a sample plan that you can download to see what kind of report is given by this financial planning tool.

Unless you have taken a bit of time to read the various things that your financial plan tells you, you will fail to see the importance of doing financial planning.

But once you see the various reports about your assets and liabilities, suggested asset allocation plan, networth, strengths and weaknesses of your financial situation, you would be compelled to take corrective actions.

I see it as this: What get’s measured, gets done correctly (atleast in future).

More Points:

A lot of people get phased out with numbers. Or may have difficulty understanding the numbers and the interpretations. That’s why, a Financial Planning exercise needs a trained consultant to help make sense of the numbers.

I also believe that a planning exercise is a blue print for further discussion and brainstorming. You can do this with your family members. But a trained consultant would add a lot of perspectives, I believe.

There are a whole lot of assumptions made to present the report. One should be able to understand those assumptions

Based on the above two points, I think it makes sense to have a fee based financial planning exercise. InvestmentYogi is charging Rs 5K for their fee based plan and to me it looks like a invitation price. Professional Financial Planners normally charge Rs 10K and above.

My Wishlist for a Financial Planning Tool:

InvestmentYogi’s tool assumes that you know your risk profile. I think that the newbie user may not be aware of his own risk appetite. That’s why it’s a good idea to ask a few questions and let the app decide your risk profile.

The assumptions they make in calculating various reports like the insurance cover required should also be clear to me. I would like to know the assumptions they make for all their calculations. I guess the fee based plan will give me that clarity.

Conclusion:

I really like this application and hope more and more people will use it. There’s the free version to start with. And if you can pay, I’m sure you would find value in your interaction with a trained consultant. (Okay, this is a general statement and I’m not recommending InvestmentYogi’s Consultants. Just recommending trained financial planners)

My short bio

Coming Soon! RupeeCamp "Financial Planning Workshop". "Join us"

Welcome back! Join me on this journey to improving our financial IQ and sharing what we know. Updates at RSS feed or Email. And spread the word please Thank You!