You need financial planning to organize your money and investments in order to create wealth, secure future and  fulfill financial goals of your life. Most of us do financial planning entirely by ourselves according to our level of income and financial targets in life. Such plans are often crude, copied and lack required insight and knowledge. However, some people don’t even feel like having any financial planning.

Ideally, you should seek advice from a financial planner to make your money work more efficiently for you irrespective of how much you earn. Unfortunately, minds of a major section of the population, including the well educated ones too, are plagued by certain negative myths and misconceptions related to financial planning.

Here we discuss 5 top myths associated with financial planning.

1. Only rich needs financial planning

This is by far biggest and the most common myth associated with financial planning. To seek advice from a financial planner, you do not have to be rich at all. It’s all about those financial goals of your life and learning some techniques to achieve them. It is nothing but having a road map validated by a field expert for creating wealth.

2. Financial advisors give generic advice and they are expensive too

Typical job of a financial planner is creating a financial plan by analyzing client’s income, assets , liabilities and future goals. Initially, by using certain risk profiling tools he analyzes client’s risk tolerance level. Finally, after much number crunching and  thorough discussion with the client, a financial planner comes with a plan, which is created keeping the respective client’s financial profile in mind. At the end of the day, the money you give to your wealth manager would cost you much less than the money you might lose by following a wrong financial path.

3. I will take life as it comes

Such kind of thought pattern is quite common and people with such mindset often end up spending all their money during their productive years. They themselves ruin prospects of a comfortable life  post retirement. Though, it is true that many people became wealthy without having any financial plan, but it is more like thinking every dropout would become a Sachin Tendulkar. A lot of people also think that having life insurance is enough to have a secure future. However, insurance is merely a risk cover that you buy; it is not an investment.

4. Finance is complicated

Financial planning is not  rocket science. It requires knowing mathematics of 8th standard, which includes simple interest, compound interest etc. Your financial adviser is there to help you understand tits and bits of finance.

5. I have a written financial plan and I am done

Just writing down your financial plan is not enough. A written financial plan includes budgeting and strategy to be followed. Implementation is the key. Proper implementation is required to  receive tangible returns. The socio-economic situation keeps changing and so do our goals in life. Your financial plan too requires reviewing and rebalancing at certain intervals in order to receive optimum benefits.

Success is only possible when you know your target and you proceed toward it by making small steps. Financial planning is all about knowing how to make those small steps.

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