5 Key Things You Should Know To Build a Better Investment Plan

Financial planning is the be-all-and-end-all of a robust investment plan and the key to achieving your goals in the future. A financial plan helps you control your finances and manage your expenses in such a way that your life goals become achievable.

The one thing that can make or break even the best investment plan is mismanagement of money. You not only need to have adequate funds to invest in the right instruments, but also have money at the right time to upgrade your investment plan as per your current life stage.

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For example, if you need Rs. 10,00,000 for your child’s education, then you need to have the funds ready by the time they turn 18 not two years later. That is why you need financial planning.

Benefits Of Financial Planning

There are numerous advantages of planning your finances effectively. Some of them are listed below:

Builds Your Savings
While it is possible to save money even without a financial plan, you will not be able to do it in an efficient way. If you want to create an investment plan from your savings, you need to have a system in place that accounts for your income and expenses.

Only then will you be able to systematically set aside money for investing in the best investment plan that will help you achieve your future goals.

Improves Your Standard Of Living
Many people falsely believe that financial planning and saving can deprive them of a good standard of living. However, with financial planning, you will be able to live a comfortable life without compromising on the lifestyle.

It also helps you choose the best investment plans that will allow your loved ones to maintain that standard of living even when you are no longer around.

Emergency Funds
A financial plan will not only take your future and current needs into account but also contingencies. It makes space for emergency funds so that you have immediate access to funds when you need it the most.

For instance, an investment plan with proper financial planning will include plans like ULIP. ULIP full form is Unit Linked Insurance Plan that allows investors to insure and invest the premium to not only provide life cover to their loved ones but also grow wealth in the process. In case of emergencies, ULIPs allow you to make partial withdrawals from the fund value.

Peace Of Mind
With the best investment plans, you feel at ease that your future goals will be fulfilled at the right time. You will also have adequate cash in hand to pay for your monthly expenses and you are able to splurge on your loved ones without any worry.

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Tips To Create A Successful Financial Plan

If you have been confused where to start your financial planning, here is how you can create a financial plan for yourself.

Assess Your Financial Situation
Start by determining your current financial status, vis-à-vis your income, debts, expenses, investments, and savings.

Identify Your Financial Goals
Once you are aware of your finances, you need to determine your financial goals. Write them down and specify a timeline when you want to achieve them. Doing so will allow you to choose the right financial instruments for your investment plan that will help you reach that goal.

For example, if you want Rs. 5,00,000 for your child’s higher education, then you must consider investing in a child plan right now so that you have the desired sum by the time they reach that age.

Look At Various Investment Opportunities
There are multiple investment options, such as mutual funds, ULIPs, term insurance, endowment plans, etc. that make it easier for you to reach your financial milestones. For example, you can invest in equity funds to achieve long-term goals, such as retirement planning. If you want to save taxes, consider investing in PPF or ELSS fund.

Implement The Plan
Once you have found suitable instruments for your investment plan, you need to investing in them based on your age, risk tolerance, and amount.

Don’t hesitate to take help from online tools provided by all reliable insurance providers, such as Max Life Insurance, to assess the feasibility and affordability of a financial instrument before adding it to your portfolio. You can also take help from a financial advisor to help you choose the right products for your investment plan.

Monitor Your Plan Periodically
Your financial situation and needs will change with time. Therefore, you must review your investment plan regularly to ensure that it is still relevant. As you grow older, your goals and dreams will change too. To keep your financial planning suitable to your current needs, it is important to review your financial plan from time to time.

Keep the basics of financial planning in your mind when you are developing an investment plan. It will help you choose the right instruments and keep you on track with the best investment plans for a secured future!


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