7 types of financial planning. All you need to know

In the previous article, we learnt about what is financial planning? And the importance of financial planning. In this article, we will dive into the types of financial planning.

Investment planning 

Investment planning refers to allocating funds towards various investment products to create a wealth corpus and generate continuous income.  

It involves the analysis of short-term needs and long-term goals and then deciding how much money to invest in and in which asset class. Knowing how much savings you possess is the first step in investment planning. 

Tax planning  

Tax planning is a way to optimize your investment returns smartly by minimizing your tax liability by channelling your investments into particular instruments.  

With proper tax planning, you can have a higher post-tax income. Some ways to save tax are to hold your stocks for more than one year and prefer tax-savings schemes like ELSS. 

Retirement planning 

This type of planning’s objective is to ensure that you have adequate resources to live after you stop earning. Achieving a good retirement requires good planning from an early age by investing and saving a proportion of your income for your future self.  

The most important factors while considering your retirement plan are the rising inflation and the rising standard of living.

types of financial planning
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Cash Flow Planning 

Cash flow planning is more of a daily process. It involves actively budgeting your income and expenses to maximize your savings by prioritizing necessary expenses over wasteful ones. 

Insurance planning 

Having insurance is most important, even before having any other investment product. Insurance acts as a safety net for you and your investments.  

Insurance planning requires planning the amount of life cover and health cover through various comparisons between individual and family floater plans to ensure protection. 

Children’s future planning  

Planning your children’s future is an important task – be it education or marriage, these are big-ticket expenses that require proper planning and investments. 

Estate planning

 This type of planning entails the concoction of property investments; real estate investing is usually tricky because of the high investment amount and various government rules and regulations involved. However, with good consultation, real estate investments can be one of your best bets.

Consult an expert advisor to get the right plan for you 

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