My First Blog - CFP (Certified Financial Planner)

             It was almost 8 years back I first came to know about the word CFP. I was always wondering about the qualification required to pursue for CFP, as I was from a Pure Science background. Though my qualification was from a science background, I had a fascination to deal and trade in the equity market which is better known for its sophistication. It was during 2003, when I visited a trade fair in Kolkata, India, I came in touch with a Share Broking Firm Called India Bulls. Since my Childhood I was following the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) quotes in Economic Times but there was none to solve the mystery which fluctuates the price movements in the exchange. I was always following and watching the top 50 stocks and bottom 50 stocks of the exchange. Looking at the bottom stocks ,I found few of them were available at the range between 25 paisa to 45 paisa, and was wondering if I could buy those stocks out of my piggy bank savings. But I had no options to purchase those poorly valued stocks out of these two reasons- I was not particularly aware how to buy and I was too small to visit the Bombay stock exchange or Kolkata Stock Exchange. So during those days I could not figure it out the difference between Savings and Investment.

               It took almost one month for Indiabulls to open my Demat and a Trading account for trade activation. After my account was active, I was too scared as well as optimistic to invest in the exchange. In those days very few were aware of the online Trading Platform. I was too inexperienced to understand the economics and financial ratios of the companies which actually drive the market movements. I had only One Thousand Rupees out of my pocket savings, which I made a demand draft to purchase some stocks. I was little curious and wondering which stocks to purchase. After my little research and recommendation from one of my layman friend I found IFCI which was well within my budget of Rs 16 each. Taking an exposure I bought 100 quantities of IFCI at the rate of Rs. 16. I thought if it becomes Rs 16.50, I would rather sell and make a profit of Rs 50 and invest in other descent stock. But the market behaved in a totally different way than what I thought. The price of the stock dropped to Rs 10 within a week time. Out of my fear and Panic, I sold all my 100 shares at a loss of Rs 600 and my original capital became Rs 400 from my Original Rs 1000. Again within a month the stock resumed and reached Rs 20. I panicked because Capital was out of my savings and Rs 1000 was a very big figure during that time. It was just a learning lesson from my first Investment. This buy and sell had taught me a lesson for life. It was not a mistake from my side, but I was trying to get a lesson from the market behavior. So the lessons that I learned from my first investment are 1) Patience is required in every JOB you take in hand 2). It is not possible to time the Market, i.e when to buy and when to sell 3). There is enough Risk as well as Opportunity in the equity market.

              Coming back to CFP, during those days enough information was not available to guide me to pursue CFP. It was during March 2008, when I joined as a regional Trainer in Pune, I came to know little about CFP, which means Certified Financial Planner. And those who are qualified as a CFP are awarded a CFP marked as CFPCM, which is a professional Certificate course from FPSB,India- Financial Planning Standards Board, India, which is an authorized body of the Parent FPSB,Denver,USA. Pursuant has to go through a rigorous training course on main four papers out of the Six papers- Foundation & Importance of Financial Planning, Risk Management and Insurance Planning, Tax Planning, Investment Planning, Retirement and Estate Planning and the last one is of Practical in nature called “ Financial Plan Construction and Professional Responsibilities”. Definitely it is not a course of every Tom, Dick and Harry but everyone from the Pauper to the King should do the Financial planning from the early stage of life. Someone might say, I earn a lot so I don’t need financial planning. Someone might say I do not have enough money to invest, so I do not need Financial Planning. But it is the otherway round that everyone must do a financial Planning from a authorized CFP, otherwise it will be like purchasing a colorful pill from a pharmacist without consulting a Doctor when the disease is deeply rooted inside the bone marrow…..

To be Continued….