Few years ago the word financial planning was not taken that seriously. Investment done in Bank deposit,Post office and policy taken from neighbourhood insurance agent was sufficient (or was perceived to be sufficient) for providing for your financial requirement.

But in last 10 years lot of things are changed.People have started liking hotel food more ,the old joint family system in wada is replaced by posh flats & so does the requirement for managing your personal financial planning.

Why doing Financial planning properly has become the need of the hour

Increased life expectancy

With the advancement in medical science life expectancy of the general population is increased.They say that if you have money doctor will not allow you to die.

Increased life expectancy means more period without income.

Rise in nuclear families

Gone are the days when parents use to look at their children as provision for their old age.In the new era of privacy nuclear families are on the rise.

You need to ask yourself a question; after retirement I want Financial Independence or want to depend on my children.

If you want to be Financially  independent better start planning from today.

Life style inflation

Inflation is basically reduction in purchasing power of an individual. We are  all aware of it. We also experience it day in day out.

But there is new phenomenon which is life style inflation .our todays generation is going to hit most badly by this.

What is life style inflation?

Nobody have thought of paying 220 rs for a movie ticket some years a go; but now all of us are paying for it. Every time we go out for a dinner we spend thousand of rupees just like that.some of us feel the pinch of it; sometimes we want to stop this wild spending but we can't.

Because now it has become our life style !!!!!

And the inflation on life style is much higher than normal inflation

Therefore it is going to very difficult for our generation  to fund our life style

So if you want to keep doing what you do better plan for it

Take a example

Age-30,Monthly expenses-25000,Inflation -7 %, Retirment age -50 Life expectancy-80

Mr X will require 2.50 Cr approx

Complex Financial Products

Gone are the days when we used to have only limited instruments for investment.

Bank FD,Post office,gold ornaments,Insurance that's all.

Now india has on the verge of becoming a developed Financial market.There are ample options form insurance to Mutual fund and from derivatives to real estate fund.

Selecting  and analysis products according to each persons  requirement becomes very important.

Aspiration for higher life style

Today people are not satisfied with little things in life.They want more from life.

From Luxury car to farm house and from Foreign trip to expensive gadgets have no longer considered as dreams they have become needs now.

It does not mean the one should not aspire for higher things; but then you need to do  proper planning for that.