Wednesday, April 02, 2014

5 STEP PROCESS to make FINANCIALLY WORRY-FREE LIFE

I have always heard people from different classes of Income scale saying “Even after working for so many hrs.a day for last so many years, I am still not out of my financial worries, still me and my family is worried and still have lot of financial queries regarding present condition and future achievability”.


WHAT ARE GENERAL FINANCIAL QUERIES THAT MAKE ANYONE WORRISSOME?

MAY BE-
-          I have less income
-          I have more expenses
-          I have no control over expenses
-          I don’t know whether I will be able to fund my future Financial duties, responsibilities, goals and dreams
-          I have unstable income, but expenses are fixed and don’t know how to balance both
-          I know what I require today, but not what I would be requiring in future in financial terms
-          I have not given thought to my future needs, especially in financial terms
-          I need and want to do a lot but how and when?
-          Can I fund for my child’s Foreign trip, or I have to deny even if he/she has capacity to excel  in his field of liking
-          Can I fund my children’s marriage expenses or I have to tell them to fund the same by themselves ( which no Parent would ideally like to)
-          I am always afraid, if something happens to me what will my family do? I know they will not be able to carry on same living expenses for lifelong and our goals and responsibilities, may or will not be met.
-          I am afraid of any medical situation- like accidents or disability or long term illness (actually which is unavoidable in current lifestyle, especially modern lifestyle)
-          What happens if earthquake or some natural calamity strikes to me as well?
-          I have lot of Business tensions and pressures, I have no time to think, evaluate, collate my personal finances- I am not even able to track my finances-like some NSC’s have matured, but I came to know this 3 months later only etc
-          I know that I require for my future goals, but not sure how much and how I have to and I can fund it today
-          I am making budgets for my company on a regular basis, but not able to do the same for my family
-          There are lot of uncertainties in my family life, but will we be able to cope with those situations?
-          Can I fund my near and dear ones marriage expenses, as and when they come?
-          Will my family be able to use my salary A/c if something happens to me
-          Will my wife be able to transfer or use bank A/c funds as I regularly change passwords (for security reasons), but don’t always share the same with her?
-          Will I get that share in hereditary property ?
-          I have worth crores of assets made in my actively working life, will that go to the people whom I want to give as it is, easily and legally?
-          What will happen if I go for a unplanned vacation? Wil I be able to pay children’s school fees?
-          I want to buy a house , but can I fund that?
-          Is my current investment giving me good returns?        
 Can I take risk of switching job now?
-          Can I stop working for people and start my own business?
-          What is going to happen when I am retired? Will my money suffice my retirement, or I will have to depend on my children?
-          Will I have to take a loan for funding?
-          I have huge loan ,and I don’t know about my job stability
-          Will my money last longer than me and my family?

…………AND MANY  MORE Uncertainties are hovering around in lot of people’s minds ,AFTER ALL,  WE ALL ARE ALWAYS WORRIED FOR THE UNCERTAINTIES ONLY, THE THINGS WHICH ARE CERTAIN, WE ARE NOT OR LESS WORRIED FOR….right?

These are not the questions from any book, but real life worrisome questions currently going on in peoples and family’s mind. IS ANY OF THE ABOVE CURRENTLY WORRYING YOU OR YOUR FAMILY MEMBER?

I have a certain defined way to clear of the worries in mind and change these worries into certainties, which would clear off a lot of cloud and smoke around you and your thoughts and make your LIFE worry-free.
THAT’s WHAT I CALL FINANCIAL FREEDOM……..and that’s where I say

“ I help people to articulate dreams and goals of a family, define and write them, create a VISION statement (a Financial Plan), set a PATH to walk over and a PROCESS is laid to Achieve Financial Freedom "

It is just a Five Component Process and most of your worries will go on day one itself and all will go if you follow your Vision Statement, as you will experience your goals and dreams being met as per your financial plan, as envisaged by you and your family.

I help my client members by including 5 things in their Financial Plan- 5 STEP PLANNING –WORRY-FREE Process 

1.    EMERGENCY Planning

2.    RISK Assessment and Planning

3.    GOAL Based Planning

4.    RETIREMENT Planning

5.      SUCCESSION Planning

When these above aspects are measured and defined well in financial terms, along with proper portfolio allocation and implemented for, where is the question of worries? and one will have only worries (if any) which is yet not implemented for and not for any uncertainties, so one is even prepared for uncertainties with Financial Clarity, in a measured way-

EXAMPLE of HOW TO BE WORRY-FREE

Say for example if one have a goal to stop working for a company or a person and want to start own business , I will ask following and it will no longer be a worry—( just go through the following answer in your mind in this imaginary situation and one can experience after giving answers to the following)-

1. When do you plan to leave the job and start your own business? ( the reply may be 2017 or three years hence)

2. What would you do and what is the finance required to start that venture? (the reply may be starting a new IT venture which would require as per today’s value Rs.50 Lacs)

3. How many months do you think that venture will take to start generating business and Income? (the reply may be 6 months)

4. When you think will the new venture be in profits? ( the reply may be 2 and half years)

Depending upon your answers my Action would be following- ( just a sample action suggestion)

1. I will allot a gap fund for the period for which you require to kick of your business, so that basic Family expenses are not affected for that period.

2. I will create a fund to finance those funding needs to start that business. Easier said than done….Sometimes it may happen that I may not be able to create that fund as the current finances my not allow…..so atleast I am clear for that and I will give two options to my member client were
A. He/ She can take a business loan
OR
B. He/ She can ask someone to join as Funding Partner

3. I will measure the risk associated with the family in wholesome manner and advice accordingly to cover the risk associated…..it may be Life Risk, Medical Risk, Business Liability Risk, Asset risk etc

4. I will ask to prepare a POA or a WILL or A Partnership Deed or a Trust Deed etc.( as the case may be)

Now, think of various situations that can occur in above example and answer.,..

1 If any emergency comes am I ready-Yes I have covered that by creating a fund.

2. Am I ready for my basic expenses during which my new venture will not start generating income and profits?-Yes I have already covered that by creating a fund.

3. If something happens to me or my business, am I covered for Possible risks?-Yes I have measured that and am covered for that as well? I even have a POA/WILL/TRUST DEED/Partnership deed in Place.

4. If my self- funding is not possible I have even explored other funding options to make sure that I am financially well prepared and very clear in mind to start the venture in a way were I only need to think of the business and not everything and anything else.



So Need I be worried for my Finances any more…….Ney….. I am going to challenge my personal fear in adventure sport this summer….I am worried for that….Ha HA…..:-)

WISH YOU ALL WORRY-FREE FY 14-15 AND LIFE AHEAD


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