10 Reasons: Why a written Financial Plan can make a difference

A Financial Plan helps you analyse your Short, Mid and Long-Term financial goals and acts as a go-to action plan document to help meet those goals. The following are the 10 key benefits of documenting such a plan.


  1. Income: You can manage your Income sources effectively through planning, know what are your Active and Passive income streams and visualize at what stage in the future both these streams stack up against one another.
  2. Cash Flow: Manage your Cash Flow efficiently by monitoring your spending patterns. Effective Tax Planning and budgeting could help ensure your Incomes stay above your expenses resulting in positive cash flow.
  3. Investment: A proper financial plan considers your personal circumstances, objectives and risk tolerance. It acts as a guide to help choose the right types of investments to fit your needs, personality, lifestyle, and goals.
  4. Capital: Money makes money, an increase in cash savings, can lead to an increase in your capital. Allowing you to consider more sophisticated forms of investments to improve your overall financial well-being and/or providing sustainable passive income streams.
  5. Family Security: Providing for your family’s financial security is an important part of the financial planning process. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.
  6. Financial Understanding: Better financial understanding can be achieved when measurable financial goals are set, the effects of decisions understood, and the results reviewed. Giving you a whole new approach to your budget and improving control over your financial lifestyle.
  7. The standard of Living: The savings done by good planning can prove beneficial in difficult times. For example, you can make sure there is enough asset saved through passive incomes to replace any lost income should a family breadwinner become unable to work.
  8. Assets: A nice ‘cushion’ in the form of assets is desirable. But many assets come with liabilities attached. So, it is important to determine the real value of an asset. The knowledge of settling or cancelling the liabilities comes with the understanding of your finances. The overall process helps build assets that don’t become a burden in the future.
  9. Emergency Fund: A sudden change to the financial situation can still throw you off track. It is good to have some investments with high liquidity. These investments can be utilized in times of emergency. Once a constant cash flow is established and desire to invest into more sophisticated investment plan is achieved, the passive income obtained from these vehicles can provide you with that extra bit of savings and help you scale the summit of financial freedom
  10. Ongoing Advice: Establishing a relationship with a financial advisor you trust is critical to achieving your goals. Your financial advisor will meet with you to assess your current financial circumstances and develop a comprehensive plan customized for you. Like a lawyer or a doctor, your financial advisor should also be a part of your power team whom you can put your faith into.

Interested in knowing more about building a robust financial plan? We would love to have a word with you.

Written & Published by:
Prashanth Prabhu, Founder – 29k Group

Sheren Susairaj, Marketing Associate – 29k Investment Advisers Pvt. Ltd


The Prosperity Architecture & The 3 Stages of Generating Passive Income


Application of the essentials (Capital, Cash Flow, Team and Leverage) into our structured framework will help you analyse where an individual’s investment/asset falls into via the bucketed stages as shown below. The construction of the system involves three stages and each stage could take from months to years to establish, hence, patience is key.

The diagram illustrates different Stages and each Stage signifies different investment vehicles. Every Stage has a different purpose, whether it is to create a sound foundation or strengthen your core or amplify your performance.

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Stage 1: Foundation: The objective at this Stage would be to reach a critical amount of Liquid able assets. Without sufficient liquidity at the base, the whole system risks the possibility of crashing to the ground. At 29k, our preferred vehicle for Stage 1 construction is Mutual Funds; preferably diversified across Geographies and Currencies. As long as the conditions of liquidity are met, there can be a flexibility in choice. Some investors may spend sometimes years at this step hence the vehicles like mutual funds offer them a possible inflation-adjusted positive return over investing in traditional vehicles like Fixed Deposit and Gold. We recommend at least 50% of the investable assets to be placed in this section.

Stage 2: Core: At the core of the pyramid is building assets with an expectation of creating cash flow streams. Real Estate with robust yields or Structured Notes with regular coupons is used to strengthen the core. We avoid applying leverage at this stage as any adverse impact can spread to the foundation of your Prosperity Architecture. One bonus essential that we at 29k apply here is to always purchase below par. In other words, always purchase at a discount. This will help build the margin of safety and improves ROI. We recommend 30% of the investable assets to be placed at the Core.

Stage 3: Performance: This is the step that makes good for all the time and effort that was spent working hard navigating your way through Stages 1 and 2. With the assurance that 80% of your assets are safely stored at the Core and the Foundation levels, Stage 3 can be attempted with confidence. Here we introduce Leverage: With the remainder of the 20%, an application of 1:10 leverage means that your wealth under your control amplifies. Again, one has to bear in mind that the wrong application of this added boost in the amount of money under your control could affect the Core and a disastrous application can shake the foundation.

Interested in knowing more about building a robust financial plan? We would love to have a word with you.


Written by Prashanth Prabhu

Founder – 29k Group