Financial Planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a house, saving for your child's higher education or planning for retirement. It provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. For example, buying a particular investment product might help you pay off your mortgage faster or it might delay your retirement significantly.
Some personal finance websites, magazines or self-help books can help you do your own Financial Planning. However, you may decide to seek help from a professional Financial Planner if:
- You need expertise you don't possess in certain areas of your finances. For example, a Planner can help you evaluate the level of risk in your investment portfolio or adjust your retirement plan due to changing family circumstances.
- You want to get a professional opinion about the Financial Plan you developed yourself.
- You have an immediate need or unexpected life event such as a birth, inheritance or major illness.
- You feel that a professional Advisor could help you improve on how you are currently managing your finances.
- You know that you need to improve your current financial situation but don't know where to start.
- Don't set measurable goals.
- Make a financial decision without understanding its affect on other financial issues.
- Confuse Financial Planning with investing.
- Neglect to re-evaluate their Financial Plan periodically.
- Think that Financial Planning is only for the wealthy.
- Think that Financial Planning is for when they get older.
- Think that Financial Planning is the same as retirement planning.
- Wait until a money crisis to begin Financial Planning.
- Expect unrealistic returns on investments.
- Think that using a Financial Planner means losing control.
- Believe that Financial Planning is primarily tax planning.
- To ensure that your immediate family has some financial support in the event of your demise
- To finance your children’s education, marriage and other needs
- To have a savings plan for the future so that you have a constant source of income after retirement
- To ensure that you have extra income when your earnings are reduced due to serious illness or accident
- To provide for other financial contingencies and lifestyle requirements.
- Anyone who has family to support
- Is a bread earner
- Housewife
- Children to secure their future
- Can NRI invest in mutual fund schemes? Yes, NRIs can invest in any mutual fund schemes
To invest in Indian Mutual Funds, the NRI has to open any one of the following three
kinds of accounts. He can open any of these accounts through the banks who provide
the facility. The three types of accounts are as follows:
» Non-Resident (External) Rupee (NRE) accounts are Rupee accounts on a
repatriable basis. They can be opened with either fund remitted from
abroad or local funds, which can be remitted abroad.
» Ordinary Non-resident Rupee (NRO) accounts are Rupee accounts and
can be opened with funds either remitted from abroad or generated in
India. The amount in such accounts is non-repatriable.
» Fully Convertible Non-Rupee (FCNR) accounts are similar to the NRE
account except that the funds are held in foreign currency like USD, GBP,
etc.
Most of the AMCs have taken the permission for NRI investments in their
schemes; hence no permission is required for investing in the schemes of
those AMCs.
» Only OCBs and FIIs require prior approvals before investing in our
schemes.
No. All investments have to be in Indian Rupees. A convenient way to invest would
be through NRE account.
Yes, a POA (Power of Attorney) holder is allowed to invest in mutual funds on behalf
of an NRI. However, the signatures of both the POA as well as actual investor should
be compulsorily present in the required documents in order to invest in MF