Three essential steps to ensure success of a well-written financial plan

By: | Updated: September 11, 2018 2:02 AM

It is an illusion that a well-written financial plan will automatically bring financial success. Investors, at times, underestimate the challenges they need to overcome when executing their plan.

financial plan, steps for financial plan, physical shares, physical share certificates, Certified Financial Planner, inflationThe following three key things must be always considered for the success of a well-written financial plan:

Amit Maheshwari

It is an illusion that a well-written financial plan will automatically bring financial success. Investors, at times, underestimate the challenges they need to overcome when executing their plan. The following three key things must be always considered for the success of a well-written financial plan:

Financial plan implementation

An unimplemented financial plan is like a train standing on a railway track. It is not sufficient for a train to be on the right track. The train needs to run on the right track to reach its destination. Similarly, a financial plan needs to be implemented effectively to achieve success. You may face challenges in surrendering some of the insurance policies or dematting the physical shares. In the beginning, it will look like a lot of work. If you start postponing this work, then it will be difficult for you to resume and finish it.

So, when you have a tedious task to be implemented, do not focus on the entire work. You focus only on the next step. The next step may be just to contact your insurance agent to understand the surrender procedure or to locate all the physical share certificates. By focusing just on that micro action—one item at a time—things will become easier for you to implement.

Accountability

You are responsible for where you are financially right now. It is your responsibility to implement your financial plan to reach your desired financial destination. Taking that responsibility to drive the financial plan to success is very important. Your inaction is also a decision. Instead, take conscious decisions then and there. Many a time, delaying a set of small decisions will stop and stagnate your financial plan. So take responsibility to take decisions on time to implement the plan without any break. When you implement you may get questions such as: Should I invest online or offline? Should I invest through an agent or direct? Should I invest at the beginning of a month or at the end of a month?  Not taking decision on these will stop your investments. Either of the choices will be definitely better than not investing.

Course correction

It is difficult to stick 100% to the plan. There will always be a few changes (due to inflation, economic growth and political stability) and deviations (due to updated lifestyle or goals, increased spending and emergency expenses). You need to do a course correction with the expertise of a Certified Financial Planner (CFP) to accommodate the changes and control/manage the deviations. You need to be flexible enough to accept the changes and deviations. If you are taken aback by these small changes, then you may lose interest in your financial plan.

If your insurance company wants you to surrender the policy only in the next quarter, there is nothing wrong to wait and do it. This can be easily accommodated in the plan.

Bottomline

Always check whether your financial planner will just help you in creating a written financial plan or will also act as a financial coach in executing the financial plan.

The writer is founder and director of Holistic Investment Planners

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