World Financial Planning Day: According to experts, international vacation and the FIRE are top priorities

 World Financial Planning Day: According to experts, international vacation and the FIRE are top priorities

Following the pandemic, many Indians anticipate retiring early, which has naturally increased the frequency of international travel.

The middle class in particular has experienced a substantial adjustment in their financial aspirations over time in an India that is becoming more aspirational overall.

Saving for children's education remains the top priority, but traveling abroad and retiring early have creeped up the list.

The fundamental idea behind financial planning, however—the requirement for a reliable strategy and the will to stick to it—has not altered.

Moneycontrol spoke with five financial advisors today in honor of World Financial Planning Day to learn how Indians' financial planning objectives have changed, the essential elements of a winning financial planning strategy, how to make decisions regarding high-value assets like residential real estate, and the pitfalls to watch out for. These are edited quotes from their opinions:

New financial objectives replace more established ones

Dilzer Consultants' MD, Dilshad Billimoria

Many of our clients chose financial independence retirement early (FIRE) after COVID-19. Many of our clients asked for a scenario study of delaying their retirement while they were three years away from it. We calculated it, and it was accurate for them.

Additionally, we are noticing a rise in the number of middle-class families taking vacations abroad. International vacations were originally taken every five years, but now they only occur every two years or once a year.

Additionally, a lot of couples in their 40s are saving for their elderly parents by setting up a medical emergency fund, either as a distinct objective or as part of their cash flow budgeting.

Many clients who are housewives today wish to start somewhere to become financially independent. So, whatever they can afford, we advise them to establish a SIP for their own fund for financial independence.

The key to smart financial planning is asset allocation

President and CEO of Chadha Investment Consultant, Major Ashish Chadha (Ret.

You need a financial plan if you want to be financially free. How will you ever go where you want to go if you don't know where you're going? Similar to this, in order to enjoy life's pleasures and achieve financial freedom, one must first establish a clear set of financial goals with timelines for achieving them and then develop investing discipline.

It's also crucial to provide one's parents and family with proper insurance coverage. Additionally, you need to accumulate an emergency fund for at least six months' worth of costs, including loan EMIs.

In both good and bad economic times, do not alter your asset allocation in response to market highs or market crashes. The discipline of asset allocation determines your genuine value, not your pursuit of the best-performing asset class.

Both proper asset allocation and patience in sticking with an asset class for the long term, despite its volatility, are crucial.

Education of children continues to be top emphasis.

co-founder of EduFund Eela Dubey 

Costs associated with primary and secondary education are rising. For some deserving students, tuition costs are becoming insurmountable. Education inflation in India has been hovering around 10%, while tuition costs abroad have been rising by almost 2% on an annual basis in dollars. Parents would be advised to start making early plans for their children by adopting a goal-based and controlled investing strategy.

The first step in preparing for a child's education is to establish clear objectives with time and money budgets. Time is your strongest ally while investing, therefore you should get started as soon as possible. The earlier you begin, the more time you have and, thus, the larger your opportunity for progress.

Stress the importance of diversification by spreading your investments across various asset classes. To gain from diversity, routinely invest in mutual funds via the SIP (systematic investment planning) method.

Finally, make sure your investment portfolio is consistently reviewed to make sure it is in line with your goals and risk tolerance. As you get closer to the goal of paying for your children's school, rebalance your portfolio by moving your money to assets with reduced risk (like debt instruments). Longer investing horizons are better suited for riskier assets like stocks.

Rent vs. purchase remains a conundrum

MortgageWorld's founder Vipul Patel

One of the most frequently asked for advice when it comes to real estate choices is whether to buy a property or rent one.

If you intend to live somewhere for a longer period of time (20 years or more), you should consider purchasing a home. Likewise, you would think about purchasing a home while borrowing rates are declining. It's an excellent moment to invest if rates over the next three to five years have the potential to fall by 35 to 50 percent from their current levels.

The fact that Indian real estate prices have been steadily rising is another argument in favor of making the purchase. In such circumstances, purchasing might be a wise move since it will result in capital growth in addition to long-term stability. The majority of home loans are eligible for tax breaks, which help to partially offset the cost of the home loan interest and lower the overall acquisition cost. Taxes also qualify as significant incentives.

On the other hand, you ought to rent if you are dubious of your base over the long run. You gain flexibility in other areas of your life as a result. Similar to this, it is preferable to rent if you are unable to contribute 20% to 30% of a home's initial buying cost. It is also a wise choice when there is little to no stability offered by the financial and real estate markets, such as when interest rates are rising or home prices are declining. Your particular circumstance is important; renting is advised if your work or financial position is uncertain.

No compromising on the retirement objective 

Certified financial planner Kalpesh Ashar

Indian parents almost always give up their retirement plans in order to fund their kids' higher education. Parents should carefully consider their options and, if feasible, enlist the assistance of a financial advisor.

The majority of parents start their children's higher education savings later than they should. As a result, they are forced to give up on their plans for retirement. They must begin making investments in parallel for both of these objectives.

Additionally, the majority of the time, when people consider higher education, they consider studying overseas, and there is where the expense rises. Some prestigious Indian institutions likely cost one-fourth of what a comparable degree elsewhere would cost. This is a choice to think about.

Parents should be open and honest with their kids about the costs of their higher education and how that will affect their financial situation. In the event of a shortfall, taking out a student loan should be the final option. Additionally, although parents may have set aside a larger sum for college, a child may wish to follow a profession or career that doesn't necessarily require as much money. The extra cash can then be used to contribute to the parents' retirement fund.

Compared to my children's further education, I would undoubtedly prioritize retirement preparedness. The reason for this is simple math: retirement planning is for 30 years, while children's higher education is a three to five-year aim.