Financial Planning Perceptive
I often see people commit the same mistake again and again. They consider personal financial planning to be a product and not a process. The clients at the company come with an idea of buying ready-made templates to work as their financial plan. They just fail to see financial planning as an organized, well-planned system of developing strategies. It sometimes gets difficult to explain to them how we’ll be using their existing financial resources (and not take into account any additional resources they ‘plan’ to bring to the picture) to achieve both short- and long-term goals.
Also, clients are normally anxious and they want quick answers, sometimes within the first meeting. It is difficult to explain to them that it is hard to apply a rule of thumb toward savings, because it varies with age and income level. We always advise them to start with ten percent. And if that amount is too high for them, then they can start by putting a little money aside each month and slowly increasing it according to their convenience.
Filed under: Daily Ramblings, Financial Planning, Me 'n My Work, Personal Finance, Understanding Finances
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