The Financial Planning Process Essay Example | Topics and Well Written Essays - 1500 words

The Financial Planning Process - Essay Example The main aim of the analysis is to understand the difference between our needs and wants. Particular financial objectives are essential to financial planning. Others can propose financial objectives for us; on the other hand, we need to choose the objectives for which we are planning our financial situations for future needs. Financial objectives can go from using the greater part of the current income to creating far-reaching reserve funds and investment program for the financial security of our future. Developing other options is most important part of making effective decisions. Although there are many factors which will influence the available options we need to consider the possible course of action under the following categories- We need to assess conceivable approaches, contemplating the life circumstance, current economic condition and personal goals and values. We have to assess the Outcomes of Decisions. Each choice shuts off options. For instance, a choice to put resources into stock may mean that we cant take an excursion. Opportunity cost is the important thing that we need to give up while settling on a decision. This cost generally alluded to as the exchange off of a choice, cant generally is measured in dollars. Choice making will be a progressing a piece of your individual and financial circumstance. Hence, investors will need to consider the lost opportunities which will be needed to face by the investors as a result of their decisions. In this step of financial planning activities, investors need to develop a plan of action. It requires choosing correct ways to achieve our targets. After achieving the short-term goals investors need to focus on the long-term financial goals of our life. For planning our financials investors can take help of any professional person who will help them to achieve their target. Financial planning is a dynamic process which does not end after taking a particular cause of action.