How do i create a financial plan and what should i include ?

➤ Financial Planning means establishing your long term financial goal and creates a strategy for achieving them.

➤ You should have a comprehensive plan depending on where you are in your life stage.. for example:- if you are in your 20's, or just coming out of your college, or you are starting a family, you need a plan for every stage of your life and that's what financial planning is.

How do i create a plan?

➨ If you are going to do it your self, you have got to include all of these things:-

• Calculate your Net Worth:- You first got to establish your net worth. your total assets minus your total liabilities equals to your current net worth.

• Determine Cash Flows:- Allocate which accounts and how much money is designated for every month.

• Consider your Priorities:- The core of financial plan is clearly defined goals, They may include funding kids college education, buying a home, starting a business or retiring early.

What should you include?

➨ Your plan will include:-

• Budgeting Every Day Life.
• Long Term Investment Plan,
• Comprehensive Risk Management Plan,
• Tax Reduction Strategy,
• Retirement Strategy,
• Long Term Health Care Costs,
• Estate Plan.

 What are the 6 steps of financial planning?

➨ Step 1 } Understand your Personal and Financial circumstances:-

➛ A financial planner's question should lead to a better understanding of your:- Health, Family Relationship, Values, Earnings, Risk tolerance level, Goals, Priorities, and Current financial plan.

➛ All of these things will really help build that personal financial profile.

➨ Step 2} Identifying and Selecting Goals:-

➛ Your advisor may ask you:-

• What is your time horizon?
• Do you want to accomplish this goal in 5, 10, 20, or 30 years?
• What is your risk tolerance level?
• Are you willing to accept high risk to achieve your investment goals, or do you prefer a conservative approach? 

➨ Step 3} Analyzing your Current Course of Action:- 

➛ Next your advisor will analyze your current strategy to see if it's moving you towards your financial goal. If it is not, the advisor will identify alternative course of action.

➨ Step 4} Developing Financial Planning Recommendations:-

➛ An advisor will formulate their plan by including :-

• How they will meets your goal?
• How their plan integrates with other aspects of your financial plan?
• Whether the plan is independent or need to be implemented with other recommendations.

➨ Step 5} Implementing the Financial Planning Recommendation:-

➛ Implementation can be the most difficult step in financial planning.

➛ It takes discipline and desire to put a plan into action. you will also need to clarify what steps your planer is taking on your behalf.

➨ Step 6} Monitoring Progress and Updating:-

 ➛ Plan evolve and change just like life. This is why the plan need to be monitored and tweaked from time to time.

You must consult a Financial Adviser before investing your hard earned money.