JIMS Rohini Organized Guest Session on Overview of Financial Planning

The PGDM-RM batch (2024–26) had the privilege of participating in an enlightening guest session titled "Overview of Financial Planning" on 23rd January 2025 (Thursday). The session, conducted by Mr. Ashwin Gupta, Associate Vice President and Sales Trainer for the North and East Region at HSBC Mutual Funds, was held from 11:30 AM to 1:00 PM.

Mr. Gupta delivered a comprehensive discourse on financial planning, emphasizing its critical role in personal and professional success. The session was an engaging blend of theoretical insights and practical takeaways, equipping students with the tools to achieve financial independence and stability.

1. Financial Independence

Financial independence was the cornerstone of the discussion, with Mr. Gupta underscoring its vital role in achieving a stress-free and self-reliant life. He explained that financial independence is a deeply personal concept, varying from person to person based on individual goals, lifestyles, and aspirations.

To illustrate, Mr. Gupta divided life into three key phases, each with distinct financial needs and challenges:

• Birth and Education (0–25 years): This phase is financially supported by parents or guardians, focusing on education, skill development, and personality growth. While financial independence is not achievable at this stage, early awareness of money management is critical.
• Earning Life (25–60 years): As individuals begin earning, this phase is pivotal for achieving financial independence. It includes funding significant milestones like marriage, housing, and children's education. Disciplined savings and investments, coupled with retirement planning, form the bedrock of financial security during this phase.
• Retirement (60+ years): This final phase relies on wealth accumulated in earlier years. It addresses medical expenses, maintaining a comfortable lifestyle, and ensuring peace of mind. Early and consistent planning ensures a stress-free and financially stable retirement.

2. Need for Financial Planning

Mr. Gupta highlighted how structured financial planning ensures better decision-making and resource allocation, particularly during uncertain times. It helps individuals navigate life’s complexities and achieve both short-term and long-term financial goals.

8 Steps of Comprehensive Financial Planning

The session delved into a methodical 8-step process for creating a robust financial roadmap:

• Computing Net Worth and Cash Flow: Evaluating assets, liabilities, and cash flow to assess financial health and establish a solid foundation.
• Contingency Planning: Building an emergency fund to tackle unforeseen circumstances and financial disruptions.
• Investing: Strategically aligning investments with personal goals while diversifying across asset classes.
• Tax Planning: Maximizing savings through efficient tax management and utilizing deductions and exemptions.
• Retirement Planning: Leveraging the power of compounding to build a secure post-retirement corpus.
• Insurance Planning: Safeguarding against unforeseen risks with life, health, and asset insurance.
• Debt Management: Differentiating between good and bad debt, prioritizing repayments, and maintaining a healthy credit score.
• Estate Planning: Ensuring assets are distributed as per one’s wishes and creating a legacy for future generations.

Additional Insights Shared by the Speaker

Rich People Plan for 3 Generations, Whereas Poor People Plan for Saturday Nights

Mr. Gupta emphasized the importance of long-term planning, comparing the mindset of wealthy individuals who focus on building generational wealth to those who prioritize short-term pleasures. He encouraged adopting a forward-looking approach to create lasting financial stability.

Three Essential Products for Financial Management

The speaker recommended three indispensable financial tools:

• Life Insurance: To secure dependents’ financial future.
• Health Insurance: To mitigate rising medical expenses.
• Investments: To grow wealth and achieve financial goals.

This simple yet powerful formula estimates the time required for an investment to double, based on a fixed annual return. Dividing 72 by the interest rate provides a clear understanding of compounding's impact.

The Magic of Compounding

Mr. Gupta described compounding as the "8th wonder of the world," demonstrating how consistent and early investments can yield exponential growth over time.

Monthly Budgeting and the Expense Quadrant

The speaker stressed the importance of monthly budgeting to track spending and allocate resources effectively. He introduced the Expense Quadrant, dividing expenses into four categories:

• Necessities: Essential costs like food, housing, and utilities.
• Wants: Non-essential but desirable expenses.
• Savings: Funds set aside for future needs.
• Investments: Allocations toward wealth-building instruments.

Smart Investing – The SMART Approach

He defined smart investing as setting goals that are:

• Specific, Measurable, Achievable, Realistic, and Time-Bound (SMART).

Six Steps to Achieve Financial Goals

1. Define financial objectives.
2. Classify goals into short-, medium-, and long-term.
3. Evaluate the current financial state.
4. Measure risk tolerance.
5. Identify and diversify investment avenues.
6. Monitor and rebalance portfolios regularly.

Conclusion

The session was highly interactive, with students enthusiastically engaging in discussions and posing thoughtful questions. Mr. Gupta’s practical insights, coupled with relatable examples, left the attendees with a wealth of actionable knowledge.

This enriching session reaffirmed the institute’s commitment to holistic education by bridging theoretical learning with real-world applications. Students walked away inspired to take charge of their financial futures with discipline, foresight, and confidence.