Thursday, January 12, 2012

Benefits of Financial Planning

After knowing what is Financial Planning and its scope, you would be wondering what would be the advantages over your financial planning. Below are some of the benefits you might receive when you invest the time, energy and money to develop your own personal financial plan.

1. Assessing Financial Picture 
Financial Planning helps you to assess your current, complete financial picture (cash flow, net-worth, investments, income taxes, etc.) to determine your financial goals. Financial Planning will help in analyzing every aspect (Assets, Income, Loans, Insurance, Taxes, Business interests, Wills etc.,) of your current financial situation in light of
your objectives as well as the current legal, tax and economic environments.
2. Future needs
The future finance needs become clear, sensible and realistic, both in terms of the quantity and also the timing which leads to your financial independence
3. Financial control
Having a good financial plan enables to have definite control over your finances. Analyzing your current financial situation & planning for the future needs will reduce the impact of an unforeseen financial crisis.
4. Investment strategies in sync with financial plan (Investing in a profitable portfolio)
Individuals can make good investment strategies in synchronization with your overall financial plan to develop and invest in a profitable portfolio. A financial plan makes it simpler for individuals to increase their cash flow and make good investment decisions. Best Investing decisions are possible when allocating their financial assets.
5. Reducing taxes
Proper Financial Planning by allocating income and assets effectively will be helping in reducing individual's taxes and developing a tax-deferred strategy.
6. Identify weaknesses and recommend improvements
Financial Planning will help you in overcoming your weaknesses  in the management of your finances and  provide specific recommendations to help you achieve your financial objectives.
7. Creating a suitable retirement plan
Financial Planning will be useful in determining 1) your pre and post retirement life income and expenses, 2) your contributions (savings) towards it to meet your retirement goals. Deciding and creating a suitable retirement strategy and constantly monitoring the performance of your retirement financial plan will give you a healthy financial future and happy retirement life.
8. Reduced Stress
By prudent financial planning and worst case scenario planning, you know exactly what your money is doing. This knowledge and understanding helps you feel more secure and less stressed.

In precise, financial planning can give you a clear picture of your current situation, a strategy about where you are going and where you should be in future. It's never too late to start your financial planning…

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  1. Financial and retirement planning is a must for those who want to retire financially free. It would prove difficult for anyone who hasn't planned their retirement carefully, especially if they did not plan to invest and try to at least have a passive income until they are very old.

    More of early retirement and investment here at The Do Over Guy

  2. I agree with you, Greg. Financial planning is something all of us must do to make sure we are financially secured as we get older. By starting early and being financially free and independent at a young age, the chances of yourself being well-off and being able to take care of yourself in your retirement years increases. Just my two cents, great post. Hope more people read this and become more informed.

  3. Hey there! Thank you for sharing your thoughts about financial planning in your area. I am glad to stop by your site and know more about financial planning. Keep it up! This is a good read. I will be looking forward to visit your page again and for your other posts as well.
    The Financial Planning activity involves assessing the business environment.
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  4. By financial planning services, you can make savings out of your income and plan for your future dreams.