What is the best investment plan? This is one of the most frequently asked questions by an individual but it is part of large financial planning exercise. Financial planning is one of the most important steps that an individual can take in his lifetime. With current life expectancy and increasing inflation levels, it is very important plan for your financial needs for both present and future needs. Financial planning is all about defining a financial goal and charting a step wise plan to achieve your financial goals. Your financial goals could be child’s higher education or marriage, retirement planning, buying a house or for emergencies.  There are plenty of the investment plans available in the market to achieve your goals. Let us look at the steps involved in financial planning –

1.   Clear goal setting – You should clearly define your financial goals on a piece of paper and with a time frame attached to it. For ex- If you want to buy a house after 10 years, then you should clearly set a goal like “I need to collect 50 lakhs Rs in next 10 years to buy my dream house”. After that, you can look into different investment options available to you for your goal and then select the best investment plan out of it.
2.   Know current financial position –You should clearly know your current financial position like your current household income and current expenses. You should clearly factor in factors like current lifestyle and obligations like credit cards or loans outstanding.
3.   Develop a financial plan – Now is the time to answer your initial query of what is the best investment plan? There are plenty of investment options available in the market. At this step, you can search for investment plans for your profile. Your profile would include factors such as your current age, number of dependents, your risk aversion etc. For ex- if you want to achieve goal of peaceful retirement then you could start investing your money in few retirement plans that offer good retirement income or if you want to achieve your goal of education of your child then,  you can start by investing your money in safer options like fixed deposits and saving plans. Higher equity exposure is recommended for individuals in age bracket of 20 to 35 . With increasing age, you should move your best investment plan towards safer options like fixed deposits. Fixed deposit rates are usually lower than equity returns but, they are much secure.
4.   Implement the financial plan – Now it is the time to start implementing your plan. Your plan is developed and all calculations have been done, this time is the actual step that will help you achieve your financial goals through different the best investment plan you have planned for yourself.
5.   Monitor the plan – Success of any plan is not achieved until we regularly monitor the plan and take corrective actions when required. Your financial plan should be dynamic in nature and should adjust to changing situations all around. There are chances that you miss out on the best investment plan that may come during execution of your plan.

You can financially plan for any of your future goals like wedding, education, property, retirement etc. You just need to follow above mentioned steps diligently and with open mind. With plethora of investment options available to you, setting and meeting your financial goals is quite easier then it seems.