Page 237 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning Tanima Dutta, Lovely Professional University

Notes Unit 13: Strategies of putting together a Complete
Financial Plan

CONTENTS

Objectives
Introduction
13.1 Strategy Development Process

13.2 Investment Decisions
13.3 Implementing the Personal Financial Plan
13.4 Summary
13.5 Keywords
13.6 Review Questions

13.7 Further Readings

Objectives

After studying this unit, you will be able to:

Know about the strategy development process;
Explain the investment decisions;
Learn about the conservative;
Understand the asset allocation: The key to achieving higher returns.

Introduction

In the previous units you have studied various aspects relating to personal financial planning. In
this unit you will learn how to devise a complete financial plan with the help of all the financial
tools so that you can develop a comprehensive plan that would help in meeting your financial
objectives. As you know that none of the strategies alone can secure a person’s current or future
financial position. The principle of comprehensive financial planning dictates that all the above
strategies need to be addressed for each person.
Every person, regardless of age, will earn and spend income and, as such, will need some
method of cash flow management. The retired person will have investment income and/or age
pension benefit and if retiring at, say, age 60 will have an average of 16-20 years’ life expectancy.
The younger person will have the task of reducing liabilities such as home loans as quickly as
possible along with the need to accumulate retirement capital. Simultaneously, the financial
planner needs the skill to help the younger person find the right balance in their financial
planning so as to enjoy life on the path to retirement.
Every person will need life insurance, income and asset protection at some stage in their financial
planning strategies. In addition, the majority of people will have a need for investment planning
strategy development. The strategy will also need regular review and management so as to
ensure that the strategy and the investments remain appropriate for the person.

232 LOVELY PROFESSIONAL UNIVERSITY