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Financial Planning

            Financial planning is simply the process of identifying your wealth accusation and protection goals and developing a coordinated plan to help prioritize your future financial decisions. Financial planning should be taken as seriously as a medical prescription, as it deals with your financial health. It should be seen not just as a means of achieving financial security, but as making a vital contribution to our overall happiness and peace of mind.
             Financial planning can be manageable or overwhelming, depending on how you approach it. Without guidance, it's hard to know what you need and when you need it. With the right information, tools and timeline, the choices become much easier.
             A Financial plan has three key elements:.
             Define your goals: Define what you want to achieve. Include small and large goals, from taking a vacation or buying a car to providing for retirement.
             Assess your tolerance for risk: The choice of investment options would largely depend upon the level of risk you are willing to accept. Greater risk means greater potential for higher return.
             Develop a plan for how to reach your goals: The best strategy will depend on your goals and your risk tolerance.
             In life, we all go through different stages. Each stage carries with it a new set of responsibilities and will require different planning. Financial planning can be broadly classified into three main stages of life, foundation, accumulation and conservation.
             Foundation: This early period of life is the better period to start saving for retirement, even if one is short on cash. This will not only inculcate the habit of saving, but also helps one to be better prepared to handle any devastating financial events.
             Accumulation: Most of the studies indicate that investment performance is a direct result of the investor's investment allocation, not a result of the specific investment or market timing. Therefore, in the accumulation stage one needs to work towards asset allocation and active management of investment portfolio.

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