It is that route by which you identify your investments and plan them accordingly to augment them.
It is about taking sensible decisions with the end destination in mind.
To necessitate the idea of financial planning, let us consider an example of a 45 year old Mr. Mathur who invested money but without much analysis.
Sure, he’s a much disciplined investor--he has been setting aside 30% of his income from age 30 towards investments.
He’s a well-off professional and his salary has grown an average of 10%. So, he has invested in Bank FDs, Mutual Funds, Insurances, and much more.
The house he currently owns has been bought from his savings. He plans to retire at 55. He may live till 80 years.
Now, One would think that given his attitude, he should have built up substantial wealth by now, but you would be astonished to know that the money he invested
just barely stood the inflation storm. His corpus was not even sufficient enough for his retirement, assuming 8% tax returns.
So, take your decisions sensibly.