What is the real purpose of a Financial Plan?

Published: October 4, 2017 at 10:26 am

Last Updated on October 8, 2023 at 1:48 pm

What is the objective behind creating a  financial plan? Who is it meant for?  Do young earners or DIY investors need the services of a fee-only financial planner to create a professional plan? In this guest post, Vikram Krishnamoorthy,  SEBI registered fee-only financial planner tackles these questions and discusses the real purpose of creating a financial plan and common misconceptions associated with it.

Vikram is a member of fee-only India (FOI)* and part of the freefincal fee-only planner list. He is an MBA in Finance and a Post Graduate in Financial Planning from Canada. He provides fee-only financial planning and investment advisory services for individuals and families from all over India and NRIs. His website is: insightful.in

Who is a fee-only financial planner? (this is the freefincal and fee-only India definition)

  • Someone who does not get any commissions from anyone. Someone who works only for you, the client.
  • Someone who does not shift commissions to a relative or friend (there are huge networks of financial planner which practice and advise such tactics – stay clear of them)
  • A person who is registered with SEBI as an individual  investment advisor (other registration types such as corporate or LLC should be avoided by investors)
  • A person who preferably charges a flat fee from investors and not a fee that is a percentage of investor assets.

Please note: Fee-only advisory does not depend on the location of the planner. All members of fee-only India work with clients from all parts of the world.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

* Fee-only India, a coming-together of SEBI registered fee-only financial planners. We met on Sep 24th 2017 at Mumbai. More details with a photo of all planners here: Fee-only India: launch of a movement to serve investors and advisors

Freefincal is committed to promoting fee-only advisory and has featured guest posts from such planners in the past. More will follow. Please note that neither I nor Ashal (FB group: Asan Ideas For Wealth) receive any kind of monetary compensation for promoting fee-only advisory.

Now over to Vikram.


To begin with, I would like to thank dear Pattu for inviting me to write this post. It is an honour to contribute my bit to this blog.

Practicing as a financial planner and helping many clients with their advisory needs, I have come to understand and hear from them, the real value of having a clear, structured financial plan.

To start with, most people assume that it is all about money and investments, and confuse it with an ‘investment plan’. But later they realize that it is more about life. A good plan helps you understand the relationship between your money and your life.We sometimes get lost in the numbers game and forget that investments and returns mean nothing on their own, if it is not going to add value to what you want to achieve in your life.

The real purpose of a financial plan

Financial freedom:

Financial freedom does not necessarily depend on the amount of wealth or income one has, but in how you structure your finances.

There are two things that drive us to get up every morning to go to work or do a business.

Fear – that we will not have money for our basic needs and goals.

Desire – to have a better car, house, vacation, etc.

If you are always going to work for your fears, you may not be financially free, irrespective of how much wealth you have. You achieve financial freedom when you no longer work for your fears and you have a passive income to take care of your basic needs. You can work for as long as you wish to, but that should be only for your desires.

Financial freedom is achieved when you have the OPTION to work rather than being COMPELLED to work. A good plan helps you focus your resources towards achieving this faster.

Investing in the best mutual funds or getting the best return does not necessarily equate to financial freedom. Some people have enough wealth to achieve financial freedom but don’t realize it. Some others don’t have enough but think they do. Both are equally bad. In either case, a plan gives you clarity and a good understanding of where exactly you stand and how to start moving in the right direction.

Meaningful wealth:

There are people who have a lot of wealth, but in the form of empty lands and don’t have money to send their children to college next year. What good is that if you cannot use it for the things that matter the most?

Blindly focusing on wealth creation does not guarantee a financially free life. Yes, you may achieve your goal of creating more wealth, but what is its purpose? There is no point in being the richest person in the graveyard, having lived until the last day with financial fears.

Meaningful wealth is one that works for you, not something that just looks good on your net worth statement. Financial planning is about putting your hard-earned wealth to optimal use so that you don’t work for money all your life, rather you make money work for you.

Common misconceptions about Financial Planning

Financial Planning is only for the wealthy. I will plan once I have a lot of money.

In fact, it is the other way around. In order to be financially free and create meaningful wealth, financial planning is crucial. You need a roadmap before you start a journey, to reach the destination in an optimal way. You will get clarity as to what needs to be done to achieve your goals.

I can’t identify all my goals now, so I will start planning later.

This is common, especially among youngsters. You may not be able to identify all your future goals immediately, but that is not a reason to not start moving in the right direction. Most people are not able to foresee every detail about their future goals irrespective of their age. The most important thing is to get started with whatever you can think of, and understand that every small decision you make today will impact your long-term financial future.

Financial planning is only about where to invest and how to get the best returns.

Investments are only a small part of financial planning.It is more about helping you understand the relationship between your money and your life and what steps you need to take to achieve your life’s goals. Money and investments only act as tools to help you. It is pointless to chase returns and focus on multiplying wealth without channelling it towards achieving financial freedom.


Financial Planning is about getting clarity, having peace of mind and knowing where you stand exactly, rather than being confused about your future. It helps you understand the cause and effect of each of your financial decisions, big or small, helping you make fully informed decisions. It puts your resources to optimal use and focuses everything towards your goals and your financial freedom.

I work with many DIY investors who have invested on their own, and a lot of times quite well. But sometimes they need validation, better structure, and a third person’s perspective. They work with a financial planner not to learn which mutual fund is better than another, rather ensure that they have considered everything, and to have confidence that they have validated it by a professional.

So go ahead, create your own financial plan with all the wonderful DIY tools available on Freefincal. Reach out to a fee-only financial planner if you are not able to do it yourself or want to validate what you already have.

To reach out to Vikram, you can write to vikram [at] insightful.in or via his website: insightful.in


Use this form to ask Questions or reg. the robo template ONLY (For comments/opinions, use the form at the bottom)

And I will respond to them in the next few days. I welcome tough questions. Please do not ask for investment advice. Before asking, please search the site if the issue has already been discussed. Thank you.  PLEASE DO NOT POST COMMENTS WITH THIS FORM it is for questions only.

[contact-form][contact-field label=”Name” type=”name” required=”1″][contact-field label=”Email” type=”email” required=”1″][contact-field label=”Ask your question (Got an opinion or comment, use comment box at the bottom of the page. DO NOT post them here)” type=”textarea” required=”1″][/contact-form]

GameChanger– Forget Startups, Join Corporate & Live The Rich Life You Want

My second book, Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantco-authored with Pranav Surya is now available at Amazon as paperback (₹ 199) and Kindle (free in unlimited or ₹ 99 – you could read with their free app on PC/tablet/mobile, no Kindle necessary).

It is a book that tells you how to travel anywhere on a budget (eg. to Europe at 50% lower costs) and specific investment advice for young earners.

The ultimate guide to travel by Pranav Surya is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (you will be emailed the pdf after payment)

You Can Be Rich Too with Goal-Based Investing 

My first book with PV Subramanyam helps you ask the risk questions about money, seek simple solutions and find your own personalised answers with nine online calculator modules.

The book is available at:

Amazon Hardcover Rs. 271. 32% OFF

Infibeam Now just Rs. 270  32% OFF. If you use a mobikwik wallet, and purchase via infibeam, you can get up to 100% cashback!!

Flipkart Rs. 279. 30% off

Kindle at Amazon.in (Rs.271) Read with free app

Google PlayRs. 271 Read on your PC/Tablet/Mobile

Now in Hindi!

Order the Hindi version via this link



Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.
🔥Now Watch Let's Get Rich With Pattu தமிழில் (in Tamil)! 🔥
  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter using the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl-version covers of "Chinchu Gets a superpower".
Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)