Whenever you hear about the profession called “Financial Planner” then without any doubt you feel yourself that it requires additional qualification which you can’t reach. Hence better to follow that expert blindly. But it is not the case.
Look at your surrounding, you will find so many “Financial Planners” (they may be qualified or not qualified) who are guiding your friends or relatives in managing their finance in a better way. But have your ever thought why can’t you become your own financial planner? It is either careless, as the profession is attached with money or simply not have time to heed or thought. So let us understand what are the requirements and advantages of your own money manager.
1) Qualification not required-To become financial planner yourself it is not mandatory to complete MBA in Finance, CFP or CFA. Instead the zeal to learn and execute that learning into your life directly. I noticed during my CFP study that, the syllabus they provided is basic but not exhaustive. The syllabus is designed to understand the basics in a well defined way, which you too can get it by google search (if you really want to learn). For example, compounding interest calculation or time value of money are the basic calculations one need to be expert. But those things are taught us during our school days itself (formulas) which simply we ignored or forgot. After starting my study of CFP to date, I never come across the mathematical calculations which you may say “out of our reach”. What need is simple basic mathematics knowledge. Hence if you really have a zeal to learn then you can become an expert in financial planning field too.
2) Risk Analyzer -Usually we planners analyze clients risk tolerance and risk capacity by sending few questions set to client. Once we receive those files, we do analyze what type of risk taker are they. But in reality and in my view the first and best person who can analyze your risk appetite is you and only you. This analyzing capacity will makes you to plan your money in a better way than anyone else. You can easily build up this skill by asking yourself about what type of goal you have, how much you can allocate, what you expect in return and how much loss you can bear.
3) Limitations of Support- If you have neither time nor interest then the left out option is to hire the planners. Each profession have it’s own limitations. Hence you can’t say that your financial planner will help you out in all aspect of financial life. Let us take the example, yesterday one of my client who is currently in USA for few months on her profession requirement, called me and askED for tax saving tips. After going through her requirements and current investments, I told her to opt for Bank FDs. Now on this recommendations she started to say that I need to do that FD on her part and she is ready to share the passwords with me. Eventhough it shows her faith on me but sometimes it cost you more. So understand the professional requirements and active involvement is the solution.
You can easily predict your financial goals and needs immediately and take action on that rather than looking for support from outside world.
4) Time Horizon-You can’t become financial planner in a day or two. It requires a constant effort to reach for knowledge. Hence the effort more you put on learning will make you a better planner and manager of your own money. So the solution is to search for the source of knowledge and update your knowledge continuesly. No one on this earth became expert by birth and it is foolish to believe so also. Look at top achievers in any field, you find that with constant practice, never give up attitude and searching for new things made them success.
Hence with applying the above said qualities in your life you can easily become financial planner of your own money. This actually makes you and your family a financial literate.