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Financial plans not implemented could be a futile exercise

Financial Planning

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Financial Planning article in Advisorkhoj - Financial plans not implemented could be a futile exercise

Mr. Kartik Mahadevan is a salaried individual holding a senior position in a telecom company. He is always hard pressed for time and has been postponing his own financial planning to a future date. On and off he has been investing for getting some tax benefits and to honour certain relationship commitments of buying certain products from friends and relatives. He then one day decided to take services of a financial planner and got his complete plan done. However after the plan presentation his planner gave him a list of things which has to be implemented to achieve hi set goals. However as soon as the plan was completed there was no implementation on his part. It's almost more than a year and Mr. Kartik decides to go back to his financial planner just to realize that his financial commitments have increased for the same goal as he has lost considerable time period of investing.

 The story of Kartik is a story of many today. We many at times end up getting good advice from our financial planners but a plan which is not implemented falls flat. Let's analyze the reasons of why this happens:-

 1) Time poverty: - People are hard pressed for time as there are steep commitments on professional front. But what we seem to forget is that we work hard in order to satisfy your personal goals which gets lost in the process.

 2) Fear of commitment: - When a plan is discussed many times it recommended starting investing in certain specific instruments in order to achieve ones goals. But on seeing the commitment needed at time there is a fear of not being able to do it currently and that leads to not starting anything. The fact is that it might not always be possible to touch the idealistic investment figure needed to achieve you goals but alteast a start in that direction needs to be done. This is so because goals might change and there could always be changes in our income and expenses so we might be able to catch up with the figure needed even at a slightly future date. But not starting anything will lead us nowhere. we need to remember that " a journey of a 1000 miles starts with a single step".

 3) Waiting for something wrong to happen before starting:- We many a times ignore some work in our life which is important and one day it becomes urgent. The decisions taken in panic most of the times ends up in an unfavourable result. The same rule applies to financial planning. I have seen people not taking a term insurance plan till they encounter an unexpected death in their family. This aspect of human nature makes them postpone their financial planning implementation. However genuine these reason might sound but the fact remains that goals cannot be achieved by reasons alone but there needs to be an active participation by the entire family in order to ensure that the milestones set by us turns into reality in the future.

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Mukund Seshadri

Mukund is a CFP practising in Mumbai for more than a decade. His company MSVentures Financial Planners has been helping people achieve their financial goals through systematic approach of planning, advising and implementation. His articles and commentaries regularly appear in The Times of India, The Economic Times & www.moneycontrol.com

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