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84. Explain the relationship between financial planning and Mutual Funds.
Personal finanacial discipline demand every individual to plan for expenditure and savings against current income.While moving up the hierarchy of needs , one must sitmultaneously save money for future . As one goes on in life the standard of living rises, needs increase and the expenditure to meet those needs also increases. Without proper financial planning , the future can be a miserable struggle to meet these demands.'' You don't want to see yourself in a position where you won't be struggle to meet these demands .''You don't want to see yourself in a position where you won't be able to buy your dream house, can't go on that cruise or can't pay your children's education fees.'' This sums up an individual's investment needs. Investment is the best option to meet the need and value for money in the future because it uses money saved today to earn more for tommorrow .Several investment option are available today - bank deposits ,corporate bonds, gold , real estate ,stocks, etc. Mutual Fund is an investment option that has become very attractive for retail investors who are interested in the financial markets but do not have the time , expertise and experience in good stock picking .Problem faced by the small investors in the share market have been offset by the emergence of Mutual Funds.
Ans: There are two types of financial needs that are to be met .They are protection and investment .Insurance companies offer products for protection needs .Mutual Funds broadly cater to the investment need, i.e., Mutual Funds products form a powerful set of tools for the financial planner and investors.