3. Some Golden rules to start financial planning

As a financial planner many people used to ask me that how they should start their financial planning , Where they should invest their money ,which share they should buy, now what I expect from the market as sensex is going down day by day. I always ask them one question that if market has fallen by 20% , what effect they are seeing on their savings or investments . And one pet reply I used to have that they have lost money as they had invested for some days and mean while market fell.

Friends we need to understand that financial planning is not about investing in shares for some days or some weeks to earn some short term profit, it means is to invest my surplus money for some future goals say education of my child , my retirement or my dream house.

Once I asked one of my friend that how much money is he saving on monthly basis for his financial goal and he replied “ Yaar , Kuch bachta hi kahaan hai saving k liye .” And I was amazed on his reply as I knew that he used to go to restaurant and for movie every weekend , still he has reply that he is not able to save money.

We all must be knowing about one formula of saving and i.e

Income – Expenses = Savings

But if we swap these two words the equation may be

Income - Saving = Expenses

And I m sure that just by interchanging these two words may interchange many things and meanings of financial planning in our life.

Golden rules for Finacial planning:-

1. Start investing early. Don’t think to save thousand or lacs even hundreds can do wonders
2. invest regularly
3. Invest in instrument which can give you returns more that inflation like SIP can be one of the wonderful options for savings
4. Increase your savings by some amount after some interval.
5. Clear off your debts (Like credit cards, personal loan and car loans) as early as possible as interest charges on these loans are higher. Remember loans on the depreciable assets are not good.
6. You must earn more that you spend so either increase your earnings or reduce your expenditures.
7. Monitor your expenditures.

Happy Investing

Pardeep goel

Some Questionings skills for Financial Planners !!!

Hi Friends,

A year back I had written an article which was published in official journal of Financial Planning Standarad board of India ( FPSB ). So in my Blogs I am also adding the same article.

Some Questionings skills for Financial Planners !!!

Before starting anything just imagine you have gone to meet a financial planner “X” for one of yours need for retirement planning. Now What financial planner will do, naturally he would start asking you some questions like, “ What do you do” , “ What is your income” , “Any other incomes from any other sources” , “Have you taken any pension plan “,” have you made investments in mutual funds etc” . And he starts shooting you with his bullets of questions. Now take one more case you go to another financial planner “Y” with same situation and he again asks you only one question like “Can you please help me understand about your financial status and arrangements already made by you for your retirement?”

Now whose queries would you like to answer with ease? Yes you are right it’s a Mr. Y because he is not in investigating manner, he is in counseling style where as Mr. X is asking questions in Investigating manner , Instead of the fact that objective of the both persons which is same, that is to gather information from you to provide the best solution. So Where is the difference, Difference is in the style of Questioning.

Most of the time people don’t know “what they need out of their money”. Everyone earns and spends in the entire lifespan and the one who plans both the activities in a required manner is the ultimate winner. But unfortunately, people don’t know what is planning and especially financial planning. Here comes the biggest role of ours as a financial planner. The financial planner is one who understands the need of the client and the same should be taken out from the “wants” of the client. So it’s more like a need based financial planning than a want based requirement of the client. One has to check out priorities of the life in financial terms

As a Financial Planner, the most important thing for one is to gather the information from the client. As the entire analysis and plan preparation depends upon the quality of data given by the client and analysis made by us. Now as the responsibility of quality of data provided is of the client himself, but the quality of questions asked to get the desired result is the responsibility of the financial planner. We are not acting as selling agent for any company rather we are working for our client so our desired goal is to give him the best solution for him which comprises the mix of financial products to be suggested to him. As financial planning is not on Want based it is a need based (as discussed above). Now “Want” based means client ask for particular product and we offer him the same. On the contrary “Need” based Model says that we should interview the client and get the desired reasons and then offer him the solution which he needs but he is not aware of that need. So in “Need Based Model” (Further refers to NBM) the most important thing again comes here is questioning techniques.

The most effective way to find about your clients needs is to probe him, open-ended questions, Close ended questions etc. Open-ended questions are those which do not allow client to give answer in yes or no. It demands some explanation from the client. Open end questions like “Help me to understand arrangements you have made for your retirement. . . Now client will tell u entire information about his arrangements for the same if he has done so far. But if he has not made any arrangements still the answer would not be only NO. He may say “well, I had never thought of this because of….”

Reasons here can be many. Same question can be asked in close-ended manner “Have you made any arrangement for your retirement”? Now the answer would be in either YES or NO. Here you can see that we never wanted to kill the conversation but some how because of wrong questioning technique we eventually forced our conversation to be killed.

Open end questions encourage people to talk about the thing which are important to them. Open end questions typically begin with the words “WHY” and “HOW” or phrases such as “Tell me about ….. “These questions invite others to “Tell their Story ...” When asking Open ended questions one must be ready to listen patiently.

Close ended questions

Closed ended questions are those questions, which can be answered finitely by either “yes” or “no.” Also known as saturated type questions. Closed-ended questions can include presuming, probing, or leading questions. By definition, these questions are restrictive and can be answered in a few words.

We also need to be aware about the words which we need to use in our conversation, as our mind automatically responds as per the questions asked to us. There are some words or we can say Powerful expressions if when used in particular conversation helps in probing or motivating the other person for such thing and contrary to that there are also some words which irritates the person and also make him close for the conversation.

Now Expression like “What is your opinion?”, “Which would be best for you?” motivates the person, Where as expressions like, “Understand!!”, “Got the point?” may irritate any person. So usage of the words should be properly and logically.

Now some examples of Open end, Close ended questions and some powerful expressions are given at the end of this. Now this list is not exhaustive, it can be subjective from person to person. I hope it will help all Financial Planners in their probing skills.

Some Guidelines for Questioning:

- Before interviewing tell the client 1^st that how much time this interview will take and you will ask him some questions and assure him that this would be between you and client.As before interview rapport building is must.

- There should be reason for question, Questions should not be asked only for sake of interviewing or asking questions.
- Always use client’s name during questioning.
- The intent of questioning is to provoke thought not investigation.
- Questions should be asked in very calm manner, and then a small pause and let the client speak.
- Do not repeat the question or change the wording of the questions unless necessary.
- Ask Questions in the way that Client could understand.
- Be Specific of words to be used for probing, motivating and leading.
- Be specific about some words not to be used

Examples:-

Some Open end questions:-

- Would you tell me more about….?
- Could you help me understand…?
- What do you think you will loose if u you give up ….?
- What do you want to do next?
- How can I be of help?
- Tell me about ……?
- Why you think so….?
- How do you get involved in …?
- What other issues are important to you..?
- What would you like to see improved?

Some Close ended Questions:-

- Can you give me an example ?
- Could you be more specific?
- Are you looking for … [topic]?
- Is there something specific about [topic], you are looking for?
- Do you have a citation?
- Is there any other information that you need?
- Is there any thing else that I can help you find?
- Does that help you out or does this help or will this search help you?
- Do you need more clarification?
- Is that correct/right/ok?
- How is this?
- Shall we continue?
- Is that what you are looking for?
- Does this answer your question?
- Can I help you

Words that Motivates :-

• Thank You
• Congratulations!!
• Lets
• I would appreciate your courtesy
• I want to make certain I understand how you feel.
• Will you help me?
• I'm Proud of you.
• Please
• You were very kind.
• it’s been a real pleasure
• Growths
• Qualities

Words that Probe :-

• Why?
• How?
• What is your opinion?
• What do you think?
• Can you illustrate?
• What do you consider?
• What were the circumstances?
• How do you feel about that....?
• Could you explain?
• Which would be best for you?

Words that IRRITATE

- Understand?
- Got the point?
- What I mean?
- To be honest with you
- Bucks
- Deal
- I, me, my, mine
- I'll tell you what
- You know.

I hope this would be of some help to those who want to work upon their Questioning Skills.

Happy Questioning !!

Pardeep goel

Simple steps to create powerful belief

Hi,

This is my 1st blog which I am gonna write. The reason to start is to share the things I learn in my daily life from books, analysis and if it might be any useful to any of my friend I will feel good. Here’s my recent learning.

How to develop the Belief

I had received one SMS on my mobile saying “ Four steps to attain Success 1. Think 2. Believe it. 3. Dream 4th Dare. I gave a little thought on this then got to know that we all daily think many things like success, many wishes but never had belief on the same. So having belief on the thoughts is one of important step. So I started finding the way to develop the belief from different books and while reading one of book “ Magic of thinking Big” I got to know that there is a simple process for that which is –

1. Think success and not failure – Always think about success not failure. When ever face any problem just say to yourself that “ I ’ll win ”. In every situation say to you “ I can do it.”

2. Remind yourself regularly that you are the better than you think you are. Never sell yourself short.

3. Believe Big – The size of your success is determined by the size of your belief. Think small goals and get small achievements. Think big goals and get big achievements. Big goals are often easier-certainly no more difficult-than small ideas and small plans.

Have a great belief.

Pardeep Goel

hi

Hi Friends.