There is an investor who has four saving accounts, Rs. 10,000 lying in one, Rs 15,000 in another, Rs 2,000 in the third one (the investor has paid penalty for not maintaining the minimum balance here), and Rs 65,000 in the last one. This guy had invested Rs 50,000 in a bank FD in 2012, another Rs 20,000 in 2014 and Rs 30,000 in 2017. He is heavily invested into property, apart from the house he lives in, he has two flats and few hectares of land in the outskirts of the city. Further, he has taken a traditional endowment policy for which he pays a premium of Rs 75,000 a year, and has a family medical cover worth Rs 1 Lac. The investor's goals aren't drafted and he is absolutely clueless about how his goals will be met.

There is so much clutter in this investor's finances, that if,

• This man needs Rs 15 lacs for his son's higher education after few years, even though he has properties worth crores of rupees, he may or may not be able to have the money in the hour of need, because of the super illiquid characteristic of real estate.
• The health insurance may not be sufficient, considering the ever rising medical expenses.
• In case of an emergency, he will have to accumulate cash from four different saving accounts.
• He has a majority of his portfolio concentrated in real estate, so there is lack of diversification.
• In case of his sudden demise, his family would also not know, where the investor has invested, forget the family, even the investor during his lifetime won't remember where all he has invested.

And this is the situation of many investors in India. This situation arises because we invest a random amount in random investment products without any investment horizon in mind. And what happens as a result of this approach is when need arises, in spite of having numerous investments, we are not able to accumulate enough money to meet the need.

The solution to this is, not investing more, rather organizing the investment protocol, having a holistic approach towards investments and financial planning.

So, what is Holistic Financial Planning?

Holistic financial planning means incorporating all aspects of personal finance like age, income, expenses, savings, financial goals, tax, insurance needs, commitments, liabilities, etc., and preparing a blueprint for achieving your goals taking into consideration all of these aspects.

Just like, carbohydrates, protein, calcium, vitamins, iron, all these elements put together make a complete diet, if any one of the above is missing, it can cause a deficiency in your body and can make you sick.

Similarly, ignoring any of the elements of personal finance, may leave the investor crippled in times of need or when a goal arrives. Holistic financial planning is a 360 degree approach to investment planning. It states that all the elements of personal finance must work together to achieve all the financial goals of an investor over his lifetime.

So, how do you do your holistic financial planning?

Each investor has a set of unique needs and preferences, therefore there is no universal financial plan which is the right fit for all investors.

Further, it's not just about about having a comprehensive approach and integrating all the elements of personal finance, these elements are interdependent. One investment can be of dual use, like you can invest for saving tax as well as the same investment can be mapped to a long term goal like buying a home. The portfolio needs to be optimally diversified. You must prepare yourself for emergencies, protect yourself and your family with adequate insurance, and you must identify and exploit the opportunities as they come.

It's ideal that you seek professional help. Sit with your financial advisor, spend time with him and share your complete financial standing, the assets and investments you own, what you owe, life goals, needs, priorities, etc., for your holistic financial planning.

Your financial advisor will aid you in designing a financial plan which takes care of all aspects of your life and goals. He/She will keep your emotions under check, so that you don't fall for impulse and take investment decisions triggered by market movements.

Once your holistic financial plan is prepared, there is a need review it from time to time with your advisor, to incorporate any change in your income, expenses, goals, priorities, or any asset allocation changes that may have happened in the portfolio due to markets movements.

To conclude, a holistic financial plan works by looking at the bigger picture, it takes into account every facet of your life. It ensures that all your financial goals and emergencies will be met by properly planning for them. So, sit with your financial advisor and prepare your holistic financial plan.