Question

describe some of the key activities of financial planning.

describe some of the key activities of financial planning.

Homework Answers

Answer #1

Key activities of financial planning process are

  • Budgeting: There should be a proper clarity on the avialable fund and available investment oppurtuinites through budgeting
  • Managing liquidity: There should be enough liquid cash available for the use of urgent situations
  • Financing large purchases: For larger investment or business, it is not necessary to fund everything from equity. Whereas we can seek the help of loans to reduce the financial exposure
  • Risk management: Risk management is a must in any financial planning. We should be aware of how to manage the risk in unfortunate conditions
  • Sound investment: We should find instruments based on fundamentals rather than speculations
  • Planning for retirement and the transfer of your wealth: From day 1 itself retirement planning should be done.
  • Communication and record keeping: All the decisions and expectations hould be documented so that its easy to understand what went wrong.
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