Financial planning is all about retirement planning
Planning for the future doesn’t mean that it is only for the retirement. But it also means planning for the unforeseen events of our lives. It is a common misconception that having a financial plan and savings means making huge sacrifices now and putting your immediate life goals on hold. This is wrong. With the constant rise in inflation rates, financial planning is necessary for each one of us so that we are not dependent on other people to support us for our requirements.
A financial advisor will talk in terms beyond my understanding
Sure, the average person won’t always know all the financial jargon or industry terminology that financial advisors speak every day. However, the best financial advisor will embody the heart of a teacher and won’t begin giving you advice until he or she truly listens and understands you and your financial goals. Ultimately, financial advisors realize that their success comes from helping you achieve yours.
Too young for financial planning
No one is too young or too old for financial planning. Our circumstances change at various stages of life so it’s never too early to start financial planning for better financial future.
At young age, you can create a smart budget and save for big events in your life like your marriage or buying a house. There are many advantages of starting an early plan because the interest that you earn on the invested income increases by compounding and that in turn increases the investment corpus by a phenomenal amount. Thus, starting early will help you increase your retirement corpus by an unimagined amount! Planning at the younger age is the ideal thing.
Financial Planning is only for rich
Many people think that financial planning is only for the rich and the elite people. But this is not true. The fact is that everybody needs money to meet our present and future financial needs. Hence financial planning is necessary for each one of us. However, it depends on individuals some may afford to go to a financial planner due to lack of time or other constraints. While a few people can also try to manage their finance by seeking good financial education.
I Will Lose Control of My Finances
In the end, a financial advisor doesn’t make the final call for you. They advise you, and you call the shots. The best financial advisors will give you recommendations based on investment knowledge, research, and economic trends, but it’s ultimately in your court to decide whether to proceed with the recommended advice.
Doesn’t need a financial plan
Many of us think that we don’t need a financial plan. Some think that there is a lot of time to save money. According to me, a financial plan is necessary to meet our future goals such as money needed for our retirement, buying a house, our children’s education, their marriage, etc.
Very Busy, no time for this
Yes, all of us are busy. We are busy at work, home, shopping, etc. We constantly delay our decision to check our portfolio as a result we never understand why financial planning is necessary. However, it is high time and we need to think serious about our savings and investments. Since, it is our hard money, and we need to educate ourselves where to invest and why to invest.
Financial planning is same as investing
The most common misunderstanding among people is that financial planning is all about investing money in some financial instruments like buying insurance, investing in FD, recurring deposits, etc.
Investing is one aspect of our financial planning process. Investing money is necessary but it cannot help us to achieve our financial goals. To meet our financial goals we need financial planning which is a systematic and long-term process and cannot be done in a single day.
Financial planning is a one-time exercise
As said earlier, financial planning is a strategic and systematic exercise to achieve one’s financial goals. Many times people feel that financial planning is a one-time process and there is no need to review their financial plan regularly. Everyone should keep in mind that our goals may remain same, but the economic environment, government policies, taxation norms change so we need to adopt review our plan accordingly to achieve our financial goals.
Financial planning is free
A lot of people believe that financial planning is free and they don’t need to pay for it. Remember, there is no free lunch. Some insurance agents or distributors who give you advice may mis-sell you a financial product which you don’t need completely. Some of these agents push products because they get good commission on them. Hence, it is better to educate yourself about financial products. You may also seek a financial expert’s advice to guide you for products for which he may charge you a nominal fee.