Planning your finances to achieve your objectives

1. Helprin Management Japan MAY 18 Helprin Management Review Helprin Management Review 1

2. Planning your finances to achieve your objectives Planning your finances to achieve your objectives Whether or not we are aware of the concept of financial planning, all of us plan to some extent to manage our income, savings, spending, and future obligations (money we intend to spend in the future). Despite the fact that we could be handling things well at the moment, it might not be the greatest course of action or produce the best results. Financial planning may seem technical, but all it entails is recognizing your future earnings and liabilities today, listing down your current earnings and expenses, determining whether there is a shortfall between what you will need in the future and what you can afford with your current means, and then planning your savings and investments Helprin Management Japan to make up for that shortfall. List current income & outgoings: List current income & outgoings: Start by calculating your current income, which should include your pay, the salaries of any other family members who are employed, and any additional sources of income, such as rent or profits from a company. To determine your family's current net income, add it all up and don't forget to subtract the taxes you will have to pay on each source of income. 2

3. After determining your family's net income, subtract all costs, including annual household expenses, tuition, loan EMIs, and any additional short-term obligations you anticipate (anticipated within the next 3-5 years), such as home renovations or medical care, among other things. Following this deduction, the amount you have saved for future investments is what you currently have. E Establishing long stablishing long- -term objectives term objectives The next stage in financial planning is to list all of your potential liabilities, including their due dates, amounts, and other details. Goal 1: would you have the funds to pay for your daughter's college education, for instance, if you are a 40-year-old man and she has to attend college in 8 more years, which you think would cost about $30000? Choose a financial commitment and the amount need to contribute now in order to reach your objective in 8 years. Goal 2: In a similar vein, if you plan to retire at 60 years old, you'll need to save, say, US $50,000 to maintain your present standard of living. Given the improvements in healthcare, you may expect to live in retirement for at least 25 to 30 years. A long-term low risk investment (such as debt mutual funds, pension plans) made today 3

4. can provide the finances you need to enjoy your retired life. To make such an investment now, set aside some cash. Goal 3: You could budget money to get health insurance that you'll require after you're retired or perhaps before. Your present funds must be used to pay the insurance payment. Understanding your future needs, estimating them, and investing in the appropriate asset class to pay for each objective as it becomes due are all made easier through the goal-setting process. Asset Distribution: Asset Distribution: Although goal-setting and asset allocation can go hand in hand, it is preferable to comprehend how asset allocation can affect how well your financial plan works. Your money can be invested in a variety of asset types, including stock, debt, gold, real estate, etc. Look at the investments you've previously made, such as whether you have a PPF or EPF account, money you've put in bank FDs, a mortgage you're still paying, etc. Calculate the proportion of each asset type that you have allocated from your present savings and investments Helprin Management Tokyo. As an illustration, all bank FDs, PF sums, government bonds, and debt-oriented pension plans should be categorized as debt. Any monies invested in initial 4

5. public offerings (IPOs), corporate stocks, equity mutual funds, loan EMIs, etc., should be considered as equity, as should any money used to purchase real estate. You should invest in stocks and equity-like products according to the rule of thumb of 100 minus your present age. When you are 40 years old, you should invest 60% of your yearly savings in loan products and the remaining 40% in equity-like products. If your existing investments don't appear to support this, consider balancing them by putting less money in debt securities like bonds and FDs and more in equity mutual funds or stocks. Since investing in stocks necessitates in-depth analysis, ongoing supervision, and excessive stress, the majority of individuals feel uncomfortable doing so. Equity mutual funds are a superior choice since your money is professionally managed by fund managers who thoroughly research firms before investing and regularly track the performance of the fund by purchasing strong equities and offloading worse performing securities. Commence early Commence early If you start your financial planning early, you will benefit from compounding, which will allow your money to grow for a longer 5

6. period of time with profits compounded annually, regardless of the investment choice you pick. Review and rebalancing of the year Review and rebalancing of the year A decent financial strategy is a terrific place to start, but it's crucial to stick to it and rebalance your portfolio annually. Because life's circumstances are subject to change, you should review your plan with your financial advisor and make any necessary adjustments to take into account your current situation. 6