It is never too late to begin planning

Most of us know that we have to start exercising; we have to send out those thank you mails; we have to put our finances in order and do other not urgent but important work. But for some reason we don't get around to do it and a common excuse is that we just don't know where to begin

Most of us know that we have to start exercising; we have to send out those thank you mails; we have to put our finances in order and do other not urgent but important work. But for some reason we don’t get around to do it and a common excuse is that we just don’t know where to begin.

I happened to read a book on life planning which in a very candid manner showed where to begin. It said,begin with where you want to end. To better understand this,try this exercise now – imagine this is the most important day of your life. All your friends,your closest family,your extended family,your neighbors,friends of your children,your colleagues and a few acquaintances have all come visiting. The room is well decked up in flowers and pleasant aroma envelopes the place. There is silence except for a few whispers here and there and you are in the middle of the room – peacefully lying inside a coffin. That moment,that day what would you like your spouse to be saying about you? What would you like your children,your friends,your colleagues to be thinking about you and the part that you played in their lives?

Now,don’t hurry and go on reading. STOP here and think about it. How would like to be remembered?

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If you are done,step back and see whether whatever you are doing now and however you are behaving right now,will it get you there? Based on how you are carrying yourself around,do you think you will be remembered the way you would like to be?

This exercise to me was redefining,mind numbing and earth shaking. It helped put a lot of things in perspective. It actually made sense to start with the end in mind!

Try this with your finances this way. Start with what you want to do with your money ultimately? How would you like it being used? In simple words,start with the goals,start with things that make you happy,start with people you love,start with your deepest sense of purpose. And work backwards on what you should do today to get there. If you think your children should get a particular kind of education or you should live a certain lifestyle after retirement,that would be your starting point. You can then fix a monetary value and time to this goal,go back and work out how your current assets can be used. You will be able to understand how much you will have to save,which will then tell you how much you can spend. Then that will guide you to how much returns you need to get and hence which asset class (real estate or gold or equity or fixed deposits) you should choose. From here you will be able to choose the right investments.

More often than not,people get this concept of starting with the end in mind,totally wrong with this. They start with trying to identify the best investments,the highest ranking mutual fund,most valuable stocks etc. They jump to the end when they should have come to here after detailed goal setting and so end up messing up with their money.

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It is the month of ganpati and country is gearing up to celebrate its favorite god – the god who is worshipped at the beginning of everything that we want to succeed in. The timing might be near perfect; to start with what you want your end success to be like. May ganpati show you where you want to go and bless you as you begin the journey.

Author is CEO,Freedom Financial Planners

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