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Create a foundation for a committed Financial Plan

Planners suggests a Financial plan for a youngster who has just started his career



Any individual who has started working mostly will not have much financial dependency or commitments. But like all of he/she also will have own dreams and aspirations. There are multiple investment and saving options available to them.



But the question they faces is, what would be the best instruments for them to invest in and what would be its allocations.



Goals and aspirations

Write down all your gloas both long tem and short term. Also the long term ambition.



Analyse where you stand?


  • Salary

  • Cash in bank

  • Investments

  • Any other savings

Analysis of the situation



  • Make each of the goals and aspirations quantifiable

  • Make them time bound

  • Do not invest randomlyPrepare a good financial foundation

RECOMMENDATIONS



At this point one cannot focus on a full-fledged financial plan. But focus should be on building the core of his financial plan. The following are the measures one should take:



•Define cash-flow: This can be done by maintaining an expense sheet for 6 months, clearly maintaining day to day expenses. This exercise will give an indication of surplus inventible cash-flow.



•Financial foundation: Sure risks mainly health/personal accident and life risk for at least 10 times of annual income.



• Channelize 25% of his surplus cash-flow towards retirement, because at point in life requires a small amount of money to create a good retirement corpus. A monthly saving of Rs 681 incremented by 10% pa would grow to Rs 1 crore when he is 55 years of age.



•All surplus cash-flow must first be channelized to create a fund for at least 18-24 months in a balanced portfolio, which would form the foundation for future plan
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