What is Financial Planning?

Nowadays we keep hearing the term "Financial Planning" through different Media. Have you ever wondered what it really was?

Financial Planning is the process of Identifying your Financial Goals and coming up with a plan to either achieve it or even exceed it.

An e.g. of your Financial Goal could be Planning for Retirement or paying for your kids Education.

Now why would be waste our time trying to "plan" for our future when we could just save as much as we can each month and hope that we hit our goals?

Try to imagine how a big builder would build a mall on a big piece of land. How about if he just starts laying the foundation and start building the shops and he hopes he gets everything right?

But we all know thats not the way it works. Before a single brick is laid on the ground , there is an architect who lays out the "Blue Print" for the entire Mall...Where do we fit the J C Penneys and the Food Courts and the Movie Theatres and so on.

Coming back to our example Financial Planning is the "Blue Print" of your Financial Future. Because there are so many products with so many different features and different tax consequences depending on what you are investing for. So after all the goals have been identified , a good Professional would be able to recommend to you a good Portfolio of products which should hopefully increase the chances that you would actually achieve your financial Goals.