Saturday, March 21, 2015

Financial Planning Types

Cash Planning

Managing cash flows has 2 purposes

  1. Firstly one need to manage income and expenditures flow including establishing and maintaining a reserve of liquid assets to meet unanticipated or emergency needs.
  2. secondly one need to systematically create and maintain a surplus of cash for capital investment
Investment Planning

Investment Planning is  a process of determining the most suitable investment and asset allocation strategies based on an individual's risk taking appetite, financial goals and the time horizon to meet those goals

Insurance Planning

Insurance Planning involves constructing a plan of action to provide adequate insurance against such risks.  The task here is to estimate how much insurance is needed and determining what  type of policy is best suited

Retirement Planning

It is the process of determining the amount of money that an individual needs to meet his needs post retirement and deciding on various retirement options for meeting these needs.

Phases of Retirement
  • Accumulation
  • Conservation
  • Distribution
Tax Planning

It is done to determine how to gain maximum tax benefit from existing tax laws and for planning of income, expenses and investments taking full advantage of the tax breaks. It involves making strategies to reduce, time or shift either current or future income tax liabilities. One must note that the purpose here is to minimise and evade taxes

Estate Planning

It is a plan for the devolution and transfer of one's estate after one;s demise. there are various processes like nomination and assignment or preparation of a will.  The basic idea is to ensure that one's property and assets are smoothly distributed and / or utilised according to one's wishes after one is no more

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