A lot of ambiguity and misconceptions surround the financial planning process. Here are some questions that come our way most of the time. Maybe some of your queries will be addressed here. If you have questions regarding financial planning chances are they are addressed below. If not, feel free to write to firstname.lastname@example.org and we will be happy to connect.
Is financial planning only for the wealthy?
This unfortunately is a common misconception. In our experience only those who have a plan can hope to be rich and achieve their goals comfortably. Which is why, the earlier you start with a financial plan the more confident you are for the future. In effect, if you have a financial goal, a plan to reach makes it more achievable. We can help you here.
I am only 25, still in my first job, do I need financial planning?
Financial planning helps you get clarity and confidence in your financial goals. A certified financial planner (like one from Beyond Life) also bring in professionalism, competence and rigour to the exercise. It’s like having an objective guide to steer you in the right direction. Your individual plan also gives you a structure for all future financial decisions that you will need to make.
I am 50 and nearing retirement. Is it too late for financial planning?
Retirement is the most critical juncture in life. It’s very important to ensure a steady stream of income to help you manage your expenses, while your salaried income has stopped. There’s also a fine balance to ensure your savings grow at steady rate so that you do not exhaust your retirement kitty.
A financial planner can help you direct your savings in the most appropriate savings instruments.
Everyone talks about the power of starting early. How early is that?
The Power of starting early
Creating long-term wealth is all about saving in a disciplined manner and giving your investments time to compound. There is no quick-fix solution.
Here’s an example. Take two individuals, Kajal and Hiren. Both are 25 years old and have got great jobs. They meet an advisor who tells them to start an SIP in a mutual fund which can potentially compound their savings at a rate of about 12%
Kajal immediately starts saving Rs. 10,000 every month from her first salary at age 25.
Hiren on the other hand decides he’s just started working and feels that now is the time to live it up, probably buys himself the car he’s been fancying. Saving can wait for now.
At age 35, Kajal decides to quit working and discontinues her regular savings. By now she has saved up 12 lakhs, over these 10 years, which has also been growing. And she decides to let the money continue growing as her retirement kitty.
By now, Hiren also decides that’s its time he finally gets down to start saving and starts putting away Rs. 10,000 every month for his retirement.
Hiren, continues to save Rs.10,000 every month till his retirement at age 60. Over these 25 years, he saves 30 lakhs.
At age 60, Kajal’s retirement investment is worth Rs. 4 crores
While Hiren’s investment is worth only 2 crores.
Why is it that if Hiren saved up more that his investments at age 60 are lower in value than Kajal’s.
That’s the power of compounding. Where time matters most. So, though Kajal invested lesser she invested over 35 years. While Hiren invested only for 25 years.
There’s a Chinese saying that goes like this: The best time to start planting a tree was 20 years ago, the second-best time is now.
Rather than just chase returns it’s important to fix a course and stick to it. A financial planner is your guide who helps you do just that.
|25||Age at start of investing||35|
|10,000||Investment per month||10,000|
|10||No. of years of investment||25|
|12 lakhs||Amount Invested||30 lakhs|
|4 Crores||Investment value at age 60||2 Crores|
|Rate of return = 12%|
Looks like I need a financial planner. What should I be looking for?
There are lots of financial planning services in the market.
What you really need to look for is
- A planner with the right professional qualifications like a CFP (Certified Financial Planner) certification.
- A planner who can offer unbiased, objective direction with complete alignment of interest and is completely transparent.
- Someone who offers a very high level of customer service
- Person who believes in karma. Good things come to people who do good to others.
- A person who genuinely cares and is not afraid to tell you that you are wrong.
- A planner who can showcase a track record of long-term relationships and continuity
- Someone who constantly invests time and energy in new learning
- A planner who insists on regular reviews, reporting and updates.
- A planner who brings in discipline into the process
And yes, do look at what we ourselves look for when we select the planners who become part of the Beyond Life family.
How do I become a Beyond Life client?
As a fee-only financial planning company we love working with people who are looking for
- Professional & personalized advice from competent planners
- Unbiased advice with complete alignment of interest and transparency
- Professionalism in customer service
- Value continuity with the planner
- Planners who actively invest time and energy in new learning
- Devote time to regular reviews, reporting and updates
If you’re looking for any of the following then we may not be the people you want to work with
- Looking for quick gains or returns on your investments
- You are looking for a short term engagement
- Looking for daily or weekly stock trading tips
- Recommendation on vague worded, confusing exotic financial products.
- You track daily stock market moves and need our view on it
Where do I find such a planner?
Ideally your planner should come recommended by someone who has used his or her service. If you don’t have that you are free to set up a no-strings attached meeting with one of our planners to see if it works for you.
How do I know whether a financial planner is right for me?
Ideally you should look for a financial planner the way we look for a financial planner at Beyond Life.
We believe in a long-term relationship whether inside or outside the organization. Each of our planners is chosen with great care after in-depth discussions and a keen understanding of what his or her own personal goals are. Besides the necessary academic background and certifications here are the six things that help us choose those who become part of the Beyond Life.
It comes as no surprise that most of our new customers come through strong referrals from our existing customers. This for us is the highest testimonial to our services. We also lay great emphasis on objectivity.
How does this work? How do we get started?
What will my financial plan cover?
Your financial plan will be a comprehensive document that covers:
- Helping you set your goals and their prioritization
- An income and expense analysis to optimize your expense patterns.
- A Net Worth Statement which shows your how financial strong you are.
- Contingency Planning to meet any emergency expenses like hospitalizations.
- In-depth analysis of your goals and and a funding for each
- An evaluations and mapping of current assets
- Goal Wise asset allocation to direct your savings to the most effective product based on the priority, time and your comfort.
- A detailed retirement plan which shows you your cash flows once retirement starts.
- Insurance planning to ensure you have adequate insurance covers to cover life, medical expenses and accidents.
- Download a sample plan here
Apart from the financial plan are there any other services included in the engagement?
Our services do not end with a plan. Our aim is to help keep your financial plan on track. For this there are many other services that are included to ensure the plan stays the course
- Premium payment reminders for all your insurance policies
- Services like like loans on policies, updating contact details, policy charts, premium payment calendars, maturity claims, death claims processing for all your policies
- An Annual audit for all your insurance policies to ensure contact details and nominee details are up to date to ensure hassle free claims processing
- Setting up mutual fund investments like SIPs if you choose to work through us
- Monthly consolidation of performance reports for all your mutual fund investments
- Mutual fund servicing like change in contact details, nominees and KYC updation
- Assistance with public provident fund account opening
- Assistance with purchasing bonds and investments in government securities.
Why is this fee-based? How does that make sense?
A financial planner’s fees are like what you would pay for any professional service like a lawyer, architect or a doctor. The fee-based structure is first and foremost a testimony to the fact that at Beyond Life all our advice is objective.
The fee also justifies the long hours spent with you and on your financial plans as well as constantly maneuvering through the difficult financial ups and downs. Reviews, update and course correction are part of the financial planners’ contribution to your financial journey and the fees go towards the time spent with you and at the back-end monitoring your plan.