My 1st Step Towards Financial Planning

Where do I stand! Where will I stand !

A goal without a plan is just a wish.

80% of life‘s objectives are never met because they were never planned. The one’s we do dream are neither realistic which can be followed by oneself nor are they agile enough to withstand the changes . In short life is nothing but a Brownian motion and how can one plan for that . NO, one cannot!

But we can plan for the most part of it barring the outliers. So the approach which I am discussing is a two-sigma approach which means if a plan followed using this approach has a chance that it will help you achieve 95% of your goals.

For the rest 5%, one cannot plan :)

Goals has to be SMART( Specific, Measurable, Achievable, Realistic, Timely); but is that the way we humans decide our goals ? No.

Goal is an emotion, the seed of which is sowed in our dreams. Hence how serious andcommitted are we towards achieving the same is again driven by our emotions. So are our emotions stable ? No. Hence we need a plan which will be a non emotional driver to our destination of Goals.

So if a Goal is an emotion, the plan has to be a non-emotion.

There are different types of goals or goals can be divided differently as one seek. Someone wants to climb Mt Everest or do a bungee jumping or would want to own a beautiful farmhouse. There are going to be three base drivers of our planning which will be required to achieve these goals. They are

1. ) Time
2. ) Effort
3. ) Money

The first two are to be contemplated by one self as these are the key reasons which will keep up the desire to achieve one’s goals. The third , the most important & the one which is always taken for granted is -Money.

Money is the oil of our plan to achieve our goals.

And that's where a financial plan comes into the picture. I have tried my best to create a framework here that will take care of most of us and one can actually modify according to their own goals. There are 6 core steps towards financial planning :

1. ) Realization
2. ) Contingency Planning
3. ) Protection Planning
4. ) Goal Flow Management
5. ) Execution
6. ) Review

The above framework is a practical framework which I have created after learning practically being in the profession for 10+ years.

First Step: Realization

This article in itself should be a point of realization ,what goals do I have and how am I going to achieve it . If there is a realization here then you are very well riding on the path of achieving your goals and dreams. You have taken your first step.

Sensing a plan is required is the most important as it will differentiate you form 90% living unplanned or the 90% who have everything in their which keeps changing as are their thoughts.

I will discuss each of the steps in details on how to identify each step and plan each of them individually in upcoming articles.

So if you are the one who have yet not started yet should start now & then ones who are midway in this journey already must have realized by now how important was the first step to be taken.

I am also running a mutli-asset model portfolio which can be a guiding light to many of you discovering their own path. Find it here.

Disclaimer: Google & other online platforms have made us real wise in making decisions. But still you would prefer a doctor to diagnose & recommend you a medication . Similarly one should always get hold of a professional who would diagnose you better and offer you right financial advise to help achieve your goals.