Financial planning is the process of defining different financial goals, quantifying these goals, factoring in inflation and having an investment plan to meet these goals. The importance of financial planning helps investors achieve their financial goals e.g. home purchase, children’s higher education, retirement planning, estate planning etc. and long-term financial security. It extends beyond mere income and expenses; it involves initiating steps to guarantee a stable financial future in the long term. In this newsletter, we unravel the complexities of achieving financial success while considering the RRTTLLU objectives. Today, we turn our focus to the “R” – Risk.
Understanding RRTTLLU: A Holistic Approach to Financial Planning
Before we delve into risk management, let’s briefly revisit the RRTTLLU objective. It encapsulates key elements – Return, Risk Management, Time Horizon, Taxes, Legalities, Liquidity and Unique Goals. Each component plays a vital role in shaping a comprehensive financial plan tailored to one’s unique needs.