Skip to main content

Revisit Your Financial Plan when assumptions while preparing a plan changes

Invest Mutual Funds Online

Download Mutual Fund Application Forms

Buy Gold Mutual Funds

Goal-based financial plans are in vogue. However, getting a goal based financial plan prepared by a planner or an advisor alone won't guarantee achieving all your financial goals. A financial plan is like an itinerary given by a travel agent to you. You have to take care of some operational issues to ensure a great holiday for you. For example, you have to get a visa on time or the air-ticket at the right price if you want to make the most of your holiday. A financial plan also needs such fine-tuning from your side. Most financial planners list people's failure to get their goals right and implementation and review of the plan as the main reasons why most plans fail to deliver the goals.

Confusion About Goals

There are many instances of incorrect assessment of financial goals. Underestimating the money value of a financial goal is a big risk. This happens especially when there are multiple family members involved in a financial goal and there is no communication among them. For example, an individual may think that . 15 lakh is enough for his daughter's wedding. But his wife may be keen on gifting her daughter a foreign honeymoon package, which may not fit into this budget. If you really want to quantify your financial goals right, better involve your spouse in the process, as he or she will have a say in each of your spending and saving decisions.


You have to fix a date by which you would want to achieve the goal along with the money value of your financial goal. In case the time available on hand changes, your financial plan may fall short of success. For example, an individual has decided to accumulate . 15 lakh for his daughter's higher education, and he assumed that he will pay . 5 lakh per year for three years. But what if she enrolls for 18 months course overseas, where her father has to pay . 15 lakh at the start of the course. Such a development is beyond one's control and one can do very little about it at the last moment. One probably has to use funds meant for some other objective to pay for the course. Even if you get your goals right, there are issues with implementation of financial plan.

Implementation Blues

Some individuals think they can do implementation themselves at cheaper cost. But it may not be that simple. "Financial planners may recommend cheaper products. But distributors may not sell it at all given the low or no commission. A financial planner may recommend liquid funds to maintain emergency corpus. But not all distributors are keen to offer a liquid fund as they are not remunerative. Some individuals lack discipline to meticulously implement the plan given to them. Procedural issues related to KYC, account opening and starting SIPs also adds to woes. "We come across situations where for months there is no progress on implementation of the financial plan, making a well drafted financial plan useless.


Even if the individual is keen to implement the plan, some decisions at the implementation level may change the performance of the plan. Let us understand with an example. An individual estimated that he would require Rs 15 lakh for his daughter's wedding. This included 100 gram of gold. When preparing the financial plan in CY2006, gold prices were at around . 8,000 per 10 gram and he had 15 years in hand to save the money. But now, five years down the line, gold prices have shot up at a much higher rate than average inflation to around . 28,000 per 10 gram. It resulted into wedding expense estimate going much above the . 15 lakh mark. In 2006, there was no gold ETF around. Had he started buying units of gold ETF at regular intervals after it was launched in CY2007, the gap between the estimate and the actual would have been less. One can segregate wedding expenses under two heads – cost of gold and actual wedding cost. Gold ETFs can be used to accumulate gold; and financial instruments can be used to accumulate funds required for other wedding expenses. Not all individuals are aware of such techniques and may face difficulty in implementing the financial plan. Even if you implement the plan you have to keep visiting it at regular intervals.

Failure To Review

Buy-and-forget is the biggest risk. You have to review your plan at regular intervals to ensure that you are on track. A review will bring forth any deviation from the expected progress.


Reviews help you account for changes in priorities, changes in tax structure and performance of the existing products in portfolio. It also helps you validate your assumptions pertaining to inflation and expected returns from portfolio. Some of the problem situations discussed above, could have been dealt better through thorough reviews at regular intervals. One review a year is a must.

-------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

 

Best Performing Mutual Funds

    1. Largecap Funds:
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    3. Mid and SmallCap Funds
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    4. Small and MicroCap Funds
      1. DSP BlackRock MicroCap Fund
    5. Sector Funds
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    6. Gold Mutual Funds
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

ICICI Prudential Value Fund Series I

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   Performance of the scheme will be benchmarked to the S&P BSE 500 index ICICI Prudential Value Fund is a closeended equity scheme. The scheme will have tenure of three years (1095 days) from the date of allotment of units. Units of the scheme will be fully redeemed at the end of the maturity period, unless rolled over. NFO PERIOD:   The NFO is open from October 18 to 28. The minimum subscription during the NFO period is Rs 5,000. SCHEME OBJECTIVE:   The scheme aims to provide long-term capital growth by investing in a well-diversified portfolio of equity and equity-related securities. INVESTMENT STRATEGY:     The fund proposes to invest in stocks that are trading at a huge discount in the BSE 500 index and plans to book profit and distribute dividen...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now