How To Grow Rich With Financial Planning
May 04, 2017

Author: PersonalFN Content & Research Team

Few years ago, while reading the story of Aladdin and the Magic Lamp to his 5-year old daughter Ira, Rohit wished he had a Genie in his life as well.

Do you remember the story? A young boy named Aladdin finds a magic lamp with a Genie, who grants wishes, in it. Everything Aladdin asked for, was granted. Rohit thought over what he would ask for: a pent house, a luxury car, enough wealth for Ira’s education, marriage, his early retirement.

But when we face life’s reality, achieving all these dreams is not so easy; and when it gets tough or remains unrealised, one might be inclined to feel these were simply fantasy.

Rohit realized all he had dreamed in the past may not emanate to be true. So, he decided to seek the assistance of a Certified Financial Guardian to help him distinguish between his dreams and goals taking into account his financial health, circumstances, and draw a financial plan so that his goals can be accomplished.

You see, to become rich, besides salary or business income, you need to make money work for you, where prudent financial planning and investing comes to your rescue.

A financial plan enables you to construct a road map to achieve all the financial goals and helps to build your contingency fund for any unforeseen needs that may arise.

Now let’s look at how Rohit’s financial plan became a Genie and made him rich with just few small steps.

Step 1: Fix your relationship with money

Rohit had been living on monthly credit cycles and often found himself entangled in debt trap. He felt the need to fix his relationship with money. Sometimes we forget and ignore the small expenses like travel expenses, mobile bills, junk food habit, etc. can cost you a fortune. On a daily basis, they look small but eventually can have a bearing on your financial health.

For example, Rohit for convenience sake had got into the habit of booking a cab via a mobile application while travelling to work. Everyday, he paid Rs 90 for a local auto rickshaw ride that would normally cost him Rs 60. Rohit can easily save upto Rs 900 monthly and Rs 10,800 on an annual basis if he chooses a rickshaw ride over a cab. Although these paid cab services compared to public transport are too comfortable and they lure you with discounts and cash back offers, they even get you hooked – compel you to change your preferences. Travelling in air-conditioned cars will definitely give you a short-term comfort but they may even drain out your finances, unless you make prudent choices.

Remember this worthy quote by legendary investor Warren Buffet: “If you buy things you do not need, soon you will have to sell things you need.”

Hence, it is always the small little things that matter in the larger picture called life.

Rohit wisely decided to get back to basic and used this saving of Rs 10,000 for a short weekend gateway instead.

Step 2: Clear Definition of Your Goals and Execute a Financial Plan

Perhaps you’d agree that goal setting to be the most important part for planning, it definitely plays a major role in financial planning as well. It is very important to define and classify your long-term and short-term goals in life.

Rohit wants abundant cash flow post retirement. But having a set figure in mind would definitely help in planning his retirement accordingly. Retirement planning is a long-term goal. You need to plan it prudently to live the sun-set years of one’s life in a dignified manner.

That’s why he sought help of a Certified Financial Guardian who counselled him to take a corrective course to financial wellbeing. Rohit always wanted to take Ira to Kenya to experience the wild life, but never did anything about his dream. But with the superlative guidance of a Certified Financial Guardian, he planned this trip for June 2019. He started saving and investing money in a staggered manner through Systematic Investment Plan (SIP).

To quote Waren Buffet,“Do not save what is left after spending; instead spend what is left after saving.”

So, if you plan in advance, achieving your goals will become easier and the probability of achieving them will be high too.

Step 3: Saving systematically can help you build your wealth over long term

You see, to create wealth in the long-term, regular investing along with discipline and perseverance is the key. Even a child needs discipline and regular monitoring to achieve his goal of being a good student. Hence, as a grown-up individual you consciously need to invest regularly and wisely to meet your financial goals. Investing small amounts regularly will also prove to be light on your wallet.

Regular saving and investing enables you to meet your financial goals in a comfortable manner. However, determining the amount that you would need to invest in regularly, might be difficult for you. Hence, a financial planner can help you establish the requisite corpus to meet your financial goals through planned investments in the right investment avenues.

To Sum-up…

PersonalFN believes change is inevitable and procrastination is our enemy. Please recognise that, achieving financial nirvana isn't as tedious or nerve-wrecking as it is often made out to be. To get there, all one needs to do is:

Construct a viable financial plan and
Be determined about achieving it.

You can systematically grow your wealth under the Bodhi tree of a Certified Financial Guardian. His/her financial plan will guide you to transform your dreams into goals, and goals into actionable plan and plans into a reality.

So, get your financial health check-up done today and see where you stand!