A trustworthy guide to a financial planning process exercise

fp2Yes, its money which makes your life meaningful. All the decision and planning for your future require money and that money has to be planned effectively so that you can be a successful person in your life.

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The whole planning process is called as financial planning. You have to make sure that you have a strong financial planning and you have to execute well in your life so that you will emerge as successful. This article will guide you about the thumbs rule of the financial planning process.

Setting a realistic goal: Set a financial goal for your life. In fact you can set your goal as short term, midterm and long term financial goal also. Prior to set your financial goal you have to access your financial condition and accordingly you have to set the goal. Make a calculation of the money that how much you have with you and how much you have deposited in bank and invested in market. At the same time what are the liabilities you owes. Now you set your goal according to your ability and execute the plan well.

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Risk management factor: The factor of risk management can’t be ignored at any cost. You don’t know what’s going to happen to your hard earned property in the next moment; hence it is always advised to keep the option open for the risk management. In order to get protection from risk the insurance is the only product which you should have with you. The insurance ill gives you complete protection against the odd damages. Make a list of the properties which you have and simultaneously get insurance for all the property and at the same time make a life insurance for yourself also.

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Investment and tax planning: keeping the money in ideal is not advised at all hence it is advised to invest the money on a fool proof source. Make a calculation and extract some money from your total asset and start investing in some sources. Whatever investment you will do today, certainly in the future you will get the return for it. Make sure you are investing on the right place and on right time. Similarly tax is another thing which comes under the financial planning. You have to make a rough calculation that how much tax you need to pay. Now comes the tax benefits and tax exemption, you have to make sure that you are aware of it and making the most use of the tax benefits and tax exemption.

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Planning for the retirement plan: Once your active job life will be over, you have to plan for the retirement life. While planning for the retirement life you have to pay special attention that you should have no liabilities and no loan to repay. During the course of retirement life don’t make any attempt to increase the net worthy; all you need to do is to spend the life happily and peacefully.