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How can financial planning help you obtain your goals and objectives?

How can financial planning help you obtain your goals and objectives?

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Answer #1

Every person requires to plan their finances properly to meet their goals and objectives. The goals have to be first segregated into either long-term or short-term goals.The financial planning will have to be done accordingly. For a short-term goal, the investment may be done in short-term financial plans. Similarly, for long-term goals, the money may be invested in long term financing plans. The risk and return factor will also have to be taken into consideration. This will also have to be in sync with the age of the person. A younger person may take higher risk but an elder person will prefer to take low risk. The return will also be based on the risk that the person takes. For example: In order to save for child's higher education, parents generally save over the childhood by investing in long-term financial instruments like a fixed deposit. On the other hand, for a short-term goal like to plan for a vacation, short term financial instruments may be invested in.

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