Myth one: I need to have some investments before I need a financial planner.
When someone thinks about Financial Planning, at first it comes to one’s mind about his assets so that he can think about the advice where to invest? Should one go for blue chip shares or Mutual Funds? Should one apply for an IPO? Should one go for a second house? And so on……
In fact Investing is about one fifth of what financial planning is all about. Financial planners give advice about risk management and insurance, income tax planning, retirement planning and estate planning. And to the extent that one does not reduce one’s insurance expenses and income taxes and develop the discipline to start saving the amount needed to fund one’s retirement, there will not be any investments to be advised about.
Myth two : All of my insurance is in order.
We have yet to find a client who did not have inadequate insurance, unnecessary coverage or inappropriate deductibles. Further client gets satisfaction from the fact that he is getting some proceeds on maturity even if the risk of death does not materialize and the maturity amount is a fraction of the total premium paid. Many prospective insurance buyers are reluctant to buy pure term insurance because they will not get any amount at the end if they survive the term.
Myth three : I'm saving enough for retirement.
Most underestimate the corpus required post retirement. Be hold! The longetivity is increasing thanks to advancement of medical science. Further inflation is a must reality which will reduce the value of investment if not managed properly. If one does not plan properly, one may lose the financial freedom in the golden years.
Myth four : I don't need to save for my retirement because I'm going to die young.
So what will happen if one does not die young? What's Plan B? With advances in health and science, some futurists are predicting that many people alive today will live to be over 100. The recent data by the Indian Institute of Actuaries reveals that the average longetivity for men and women has increased by more than five years in a decade. Further double digit inflation has become a reality and will eat away the value of one’s investments. Insurance Companies are reluctant to offer medical insurance at advanced age.
Myth five : If something happened to me, my family would know what my wishes would be.
Unless you've discussed your wishes with your family members in detail and put them in writing in a will, chances are they wouldn't know what you wanted. On the contrary, the creation of will is very simple. It can be made in a plain paper and is valid if witnessed by two persons.
Myth six: My estate will pass to my children.
The estate can be passed smoothly to the desired successors if you have created a will. If there is no will and one dies intestate i.e without a will, getting a succession certificate from the court of law is not only cumbersome but also time consuming.The claims may get mired in disputes which may take decades. And behold! the agony to the surviving lady spouse witnessing the whole drama and even not entitled to press for a division of the living house.
Myth seven: I can not afford a financial plan right now
Many believe that getting a financial planning is very costly. It is not so. It is much less than the fees of wealth management managers or the brokerages paid to the brokers or the commission earned by the Insurance adviser on your insurance Policy. The fees paid to a financial planner is nothing in comparison to the financial peace one gets in making a financial plan for himself.
