3 Financial Planning Mistakes People Should Avoid

Financial planning generally comes into the scenario when people find themselves falling short in meeting expenses or struggling to achieve one or many money goals. What financial planning involves is, carefully assessing earnings, expenditures, and coming at a spending equation that matches the two.As one adds their future financial objectives into this, they must include savings and investments into their equation. The truth is, financial planning tends to get tricky at times. Multiple nuances can come up in one's equation and they need to stay careful. Falling prey to the common traps can be devastating for any investor.

This article has discussed 3 such financial planning mistakes that need to be avoided at any cost. Readers will find them very useful to their cause.

Assuming every plan is achievable

The financial planning process involves writing down the different financial goals such as educational expenses, buying a house, car, and other ones. After listing the goals, values need to be assigned. This is where it gets tricky. Income, whether through investments or salary, is bound to be limited.

Financial values attached to one's goals may surpass their ability to afford every goal at the same time. And in this case, either of the two things can be done – either reduce the value assigned to every goal or simply, reduce the number of goals. Mutual Fund Investments are one of the best kinds that will suit long-term planning.

Planning without budgeting

A person may have listed their future financial goals and earmarked regular investments needed to achieve these goals. But, after the end of the month, they find that expenses have gone overboard and thus, withdraw from their investments. This is where budgeting is needed.

It means planning the expenses in a way that they can not only afford them within their income but can also engage in investments for their future financial goals without disturbing the existing ones. Like for instance, if someone's credit card expenses are rising every month, its high time they start keeping a check on their shopping activities.

Truth be told, a financial plan will suffer unless there is a budget for daily expenses. Even if an investor puts his money in the best scheme, mutual funds, they are at risk, if they are devoid of budget.

No reviews

It is important to review the plans. Frequently reviewing plans may not be needed as just a yearly one will do the job. Financial values assigned to plans can change periodically because of external costs. Also, an investor's income and expense dynamic may also witness a change because of promotion or high inflation.

And therefore, every future financial plan must be reviewed in light of such changes. And without periodic review, one may find when the time comes to use their fund for the planned expenditure, they can severely fall short. Financial planning is certainly not a one-time affair or about creating a simple to-do list. One can visit the top financial experts like Wealthclock Advisors to know about the best financial planning ways.

How is Working With a Financial Planner Beneficial?

If your investment portfolio is expanding and your finances are going well, you may wonder do you really need the help of a comprehensive financial planner? Well, these experts charge considerably for their services and thereby, you can save a good chunk of money by managing your wealth on your own. But having said that, the truth is, it is not easy at all!

The process involves a lot of complicated steps and thus, this brings the need for a financial planner once more in the question. Do you really need them? Although their services cost money, the advice you get from these professional experts can be worth your money spent! When you are not hiring the services of a financial planner, there are numerous services you are missing out that you may be unaware of. 

Check out this blog and know about them. 

1. A change in your financial behavior

As per experts, the behavioral aspect of financial planning is a lot more crucial than you might think. Everyone knows about how investing regularly and thinking long-term will help them. But where they truly lack is the time and resources to develop the right strategies that will bring them considerable financial success. 

2. Have someone to hold you accountable

Hiring a financial planner is often compared to hiring a personal trainer. A personal trainer holds you accountable to your fitness goals. The same goes for financial planners. They will hold you accountable for accomplishing your financial goals. If you have tried to reach your fitness goal you surely know how hard it can be to get up early and get dressed and visit the gym.  

But if there is someone waiting for you there, it makes things a lot easier. This level of accountability will make all the difference and the same applies to financial investment. Right Funds to invest now in India are one of the finest options available. And to weave them into your financial planning beautifully, visit top financial experts. 

3. Save more time

It takes a lot of time to manage your own investment portfolio. And this is where most investors fail! Successful investing involves a lot of steps like mapping a comprehensive financial plan, regularly rebalancing your investments, figuring out strategies to reduce your tax bill, and developing a realistic list of short-term and long-term goals.  

Sounds complicated? Well, to achieve the success you need to execute them perfectly. So, get in touch with professional financial planners and hire their services. You can also get the best Systematic investment plan online Service in return too!

How Can People Avoid Going Bankrupt?

Over time, we have seen so many wealthy people in the nation go bankrupt, or at least lose a considerable portion of their wealth. There are various known examples of sports celebrities and movie stars going bankrupt across the world. Such types of stories are not limited to just famous people.  

We have seen the common middle-class men suffering as well. So whether rich or the middle-class, this is perhaps one of the most devastating experiences to go through, especially when you have worked hard all your life to reach to acquire this status, and then see all your monetary achievements disappear slowly. Something like this can really be termed as a catastrophe. 

This blog will now present some ways to prevent this. 

Some steps that may prevent such catastrophic wealth collapse

• Stop buying things on a whim

One of the most common reasons for this state of financial health is the habit of making whimsical financial decisions. It can be an asset or maybe an over-aggressive business plan. Do take time while deciding. Discuss with actual financial experts like Wealthclock Advisors before committing to any large financial commitment. 

If you analyze carefully, you may not need such a huge financial commitment or, it may sound risky. Instead, you can use your money in fruitful investment tools like mutual fund investments. 

• Stop over-leveraging

One of the major reasons for bankruptcies is through borrowing beyond what is needed or deemed normal. This can be for both professional and personal reasons. Once you have a specific amount of wealth, avoid borrowing completely. Even when it comes to your business, it is vital to keep overall borrowing to just minimum levels.  

Borrowing, at best, should be limited to cash flow planning. Borrowing may land you in debt and this, in turn, will restrict how you spend money on different things.  

• Plan the portfolio well

Your focus should be on inflation-beating assets like mutual funds. Equity funds should be an important component of your portfolio. Avoid leverage in your investment portfolio. Too little risk or too much risk are both not optimal. You must have a reasonable mix of debt, equity, and other components in your portfolio based on your general comfort level. 

So, these are some steps that you can take to ensure you don't face a disastrous wealth collapse and go bankrupt like a lot of people do! 

Should You Consider Increasing Your Income As a Financial Goal?

From being able to watch the next edition of the world cup in four years to purchase a farmhouse that is worth a crore in the next 15, all of us have our own goals that are often considered interesting. Our life goals and dreams tend to be unlimited. The limit is just the reality of our income and savings.  

The greater the income we have the bigger financial goals we can plan and subsequently, invest for. So, if this is the case, then should you consider increasing your income as a financial goal? This blog will provide valuable insight into this subject. 

Everyone asks about returns while considering the investment 

Apart from the security of our chosen investments, like Mutual Funds, every one of us focuses on returns. Returns do matter, as they should, up to a point. Investing is all about balancing risk and the growth that we require to meet our financial goals. But what about our personal rate of return?  

Investor's personal rate of return

Asset classes have a certain expected rate of return that is based on historical data and reasonable assumptions about the future. Equity should be able to deliver 12% p. a going ahead, while liquid funds should give near to 7% p.a. But can you say the same about your potential to grow your salary or income?  

Your savings, that you invest, come from a part of your income after all! The truth is that meeting most of your financial goals will also need you to grow your income. So basically the equation is, the bigger your goal the more it might demand from you in respect to income growth. 

This is due to the fact that investment and compounding can do wonders, but not until they receive enough to grow. For the best investment-related guidance, visit experts like Wealthclock Advisors. They offer excellent Mutual Fund Investment Advice. 

Grow your income

The average salary growth for the majority of corporate India has been around 10% in recent times. This is about 2-5% over inflation. At the very least, you must work towards maintaining an income growth that is over inflation. Of course, you don't have control over all of it. It depends a lot on the organization you work for.  

So, try your best to ensure a good hike from your current job. In today's economy and especially to boost your investments, you must build a skill set that is different than your present job or beautifully complements what you use regularly. A side income will do great! It will support your present income and thus, your financial investment as well.  

Will Visualizing Your Financial Goals Help You Achieve Them?

The technique of visualization is simply great for performance improvement. Sports legends such as Michael Jordan and Tiger Woods, all have used visualization for pushing their performance limits. This helpful technique can be utilized in every walk of life and this includes, achieving financial goals.  

So, what is visualization? It is the method of vividly imagining achieving your goal. So, in other words, you are just creating an image of your success beforehand. This will, in turn, change how you think. 

Visualization builds confidence

Several studies suggest that the brain finds it hard to make a distinction between a real and a visualized image. This is based on the idea that when you visualize an action, you are stimulating the same regions of the brain as though you have performed the action in actual. What it does is, it tricks your brain that you have already achieved the goal.  

This will build the necessary motivation and confidence in actually achieving something. You will feel like you have already done it before. For a better understanding of how to achieve your goals, visit Wealthclock Advisors. They are prominent financial advisors and offer excellent mutual fund investing advice. 

How to visualize?

So, the main question that arises here is, how should you visualize? One of the most recommended ways is to visualize on the outcome, that is simply about achieving the goal. For example, if it's about sponsoring a child's education, try to imagine your grown-up-child celebrating the successful completion of their degree during the convocation ceremony. 

But think of the visualization as a movie instead of a static picture. Doing the following can help you better in this approach. 

• Choose a time and place where you will stay relaxed and be at ease. It is advised that you do it early in the morning or simply, before sleeping. Just sit in a comfortable pose and close your eyes.

• Now, imagine a situation where you have achieved success in fulfilling your financial goals. This has to be done vividly with plenty of positive emotions accompanying the whole act. Thus, if you aim to retire, then think of a dream destination where you are relaxing solely or with your spouse beside you. Mutual Fund investments are perfect for this purpose. 

Visualization may significantly improve the odds of fulfilling your financial goals. It helps you gather that much-required confidence and motivation to achieve the set goals.  

Why Should an Investor Aim to Increase Their SIP By 15% Every Year?

Most investors see saving as a burden. When some investor is told to save more, they tend to groan inwardly and are annoyed by the whole idea of saving more, despite making the best efforts towards the same! This article will unearth reasons why exactly saving more every month towards a SIP is not just a fantastic thing but a necessity as well. 

Saving is undoubtedly very hard

A person's salary generally grows by a specific percentage above the inflation rate and it depends on the economy a lot. It also depends on a couple of other factors like years of experience, the industry one belongs to, etc. In the last few years, salary growth has been within the range of 8 – 10% for the majority of private-sector employees. 

The salary growth of 10% for someone who makes 5 lakhs a year might not be that big an amount for someone who earns 12 lakhs. Taxes impact salary growth too. Inflation is presently trending at 5-6% p.a. In the case of services as well as entertainment, inflation is on the higher side as well. So, saving can be a tough thing today.  

For the best saving advice, one can get in touch with Wealthclock Advisors. They are prominent financial advisors who operate in different cities and offer excellent ways to invest in mutual funds online. 

Beating inflation requires higher saving 

For most people, their income would have grown along with their expenses. But did their savings grow in line? Inflation might be lower in the last few years but it will surely strike in the future big time! An investor's monthly saving of Rs 5000 six years back is not the same as saving Rs 5000 at present. 

So basically, an investor's present savings are more valuable than their futuristic savings. This simple fact escapes most who think it is best to save only when they have enough. Those who began saving, say for example Rs 500 in 2007, is worth double at present. Considering money is devalued every year, financial independence needs active steps to steer ahead.

The magic of a 15% increase

Saving more and investing it would make a huge difference in the lives of the investors. The best advisors always recommend investing in equity mutual funds for this purpose as it can give a return of nearly 12% annually. Increasing the SIP amount every year by a whopping 15% can dramatically affect an investor's final goal amount. 

When the increase is 15% the result is a corpus that's near to three times bigger! Yes, considering inflation, the buying power of such amounts will be lower than the numbers showcase. But upon a good understanding of one's financial goals, an investor can plan for them and invest adequately.  

Even starting small will not act as a barrier to the investor's financial security! 

In the case of investing, something is a lot better than nothing as such! 

5 Finance Lessons That Will Help Any Investor

The field of investing is quite a tough one as every investor needs to stay at the top of his game all the time. However, this does not stop potential people from investing their hard earned money in this field. Everybody wants to have a piece of cake! But to generate better results at the end one must be aware of some important financial lessons. 

This blog is an attempt to do this as investors can be better at decision-making when they are aware of some important things. A few financial lessons should be taught in schools or other financial institutions so that people are aware of them beforehand and this will give them a significant advantage over others. Also, it will make them less prone to some common mistakes.

So, let's check out the important ones below!

5 helpful financial lessons for investors

Inflation will exist

Inflation signifies a rise in your current expenses even if your lifestyle remains constant. There have been periods when the rate of inflation in India was in excess of 8% pa. Presently, it is close to 5%. So, the main point is inflation is here to stay.

Saving vs investing

You can set aside a part of your income as savings. However, if you keep your savings as a bank FD or simply in your savings bank account, then it has a pretty lower chance of beating inflation. Experts like Wealthclock Advisors suggest you engage the money in inflation-beating assets mutual fund investments. 

Stay patient in investing

Another important lesson for every investor is, they should learn to stay patient in their business. Many people get swayed by other investors when they boast of their outsized returns and big scores! One should stay patient in their actions and not let emotions get the better of them.  

Mutual funds are quite beneficial

In India, people are still now reluctant to opt for mutual funds as compared to foreign countries. In reality, mutual funds can be a great way to increase wealth and earn handsome returns. Most experts consider them as the best financial investment method available.

Plan the taxes well

Your income can be taxed at a whole rate as and when you earn it. So, if you plan your investments in the right way, you can greatly reduce overall taxes as well as delay the incidence of tax.