Definition of Financial Planning
Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial goals in relation to sourcing of funds , making right investments and tracking the progress regularly.
Objectives of Financial Planning
Financial Planning has got many objectives to look forward to :
Determining capital requirements - This will depend upon factors like present value of the Goals, inflation etc . Such requirements have to be looked with both aspects: short- term and long- term requirements.
Determining capital structure - The investment structure is the composition of debt and equity or any other assets as required.
Importance of Financial Planning
Financial Planning is process of framing objectives, investment path, procedures, savings plans and budgets regarding the financial activities of an individual or entity . This ensures effective and adequate financial and investment policies. A good investor ensures that the available financial resources are maximally utilized in the best possible manner at least cost in order to get maximum returns on investment. Here we design a smart asset allocation for our clients , to achieve this target.
The importance of Financial planning can be outlined as-
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