In today's world, each one of us is constantly trying to be updated with the latest in technology, gadgets, knowledge, lifestyle etc. Competition is fierce all around us and the urge to professionally outperform always remains within us.
Everything is changing and evolving very rapidly and we are always playing catch up. But have we changed our personal financial scenario or even seriously considered doing so?
Or, are we yet walking down the same old path where regardless of what things around us are, we are still committing the same financial mistakes and ignoring the right signals in the path of our financial well being. It's about time every individual starts to create a personal finance plan, to not only live a stress-free financial life on day-to-day basis, but also for his future money life.
Here are ten questions to ponder on and if you find yourself ticking majority of the boxes affirmatively, it is imperative that you get yourself a personal financial plan in place without much delay as these are the potential alarm signals which could spell disaster for an individual if not addressed.
1. You are not sure whether your expenses exceed your monthly/annual income.
2. Do you face a cash crunch every other month ?
3. Do you find it difficult in repaying your personal debts and liabilities i.e. credit card dues, loan EMI’s or insurance premiums ?
4. In case of any urgent monetary requirement, do you look at selling your existing investments or consider taking a loan?
5. You have not been able to put your investment objectives/goals on paper.
6. You feel your family will not be able to maintain the current lifestyle or achieve your goals if some unforeseen, unfortunate event were to happen to you (The sole bread earner) ?
7. You do not understand the financial products in your portfolio?
8. You prefer investing in only one particular asset class.
9. Do you mostly invest with your friends and relatives selling financial products - who offer free advice and offer a "latest" product every time they meet you ?
10. Would you like to know what amount would be your retirement corpus (after considering inflation)?
The reason for listing these 10 questions is that these are the precise pain points which most of the people encounter on a daily basis in their personal finances.
It is a complex financial jungle out there and it is natural that individuals lose their way in taking the right steps for their own good. A personal financial plan done correctly and ethically would automatically rectify the above mentioned shortcomings and clear the myths or should we say ‘cobwebs’ from the mind of an individual and put him on the path of financial well being presently and for his future. If this is put in place in an earnest and methodical manner, rest assured all your other endeavors in various aspects of your life will be in perfect alignment. What is necessary is taking the first step and start moving in the right direction.
Kalpesh Ashar is a member of The Financial Planners’ Guild, India and Founder, Full Circle Financial Planners & Advisors (a Sebi-Registered Investment Adviser)
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Updated Date: Jul 30, 2015 16:45:04 IST