Common Myths And Mistakes About Financial Planning

By Bhuvanaa Shreeram

“The biggest risk is not the stock market crashing or the economy slowing down. The biggest risk is assuming you’ll always have time to figure it out later” - Unknown.

Success comes with its own set of blind spots.

By the time you reach your 40s, you have probably ticked a lot of boxes—career growth, a comfortable salary, maybe even a nice car and a home. Financial planning? Sounds like something for those who haven’t figured it out yet. But here’s the irony: the more successful you become, the more complex your financial life gets.

And complexity breeds assumptions. Assumptions about how money works, how much is enough, and what financial planning even means.

So, let’s talk about the myths that keep successful professionals from making smart financial decisions—and the expensive mistakes that follow.

Myth 1: “I Earn Well. I’m Not Going To Run Out Of Money.”

Success feels permanent. But is it?

Rajeev (name changed), a senior executive in a multinational firm, had climbed the corporate ladder fast. By 42, he was earning Rs 80 lakh a year, living in an elite neighbourhood, driving a luxury car, and vacationing abroad every summer. He was of the view that financial planning was for people struggling to save, not for someone like him.

As luck would have it, a company-wide restructuring turned his world upside down.

Suddenly, he found himself jobless for 18 months, burning through his savings while still paying EMIs, school fees, and lifestyle expenses. He was quickly burning up his reserves. By the time he landed another job, he was starting all over again financially.

Reality Check:

High income isn’t the same as financial security.

Statistic: A 2023 report from PYMNTS found that 36 per cent of high-income earners (making over $200,000 annually) live paycheck to paycheck, largely due to lifestyle inflation. (Source: PYMNTS Consumer Finance Report, 2023)

Your lifestyle expands to fit your income, but if that income stops, does your financial plan still hold up?

A solid plan ensures that whether your career soars, stalls, or shifts - whether life is all smooth sailing or is throwing tantrums, your financial security remains intact. 

Myth 2: “Financial Planning Is For The Middle Class. I Don’t Need It.”

Financial planning isn’t really about budgeting—it’s about spending intentionally.

Anita (name changed), a 45-year-old CEO dismissed financial planning as “something middle-class families do to save a few lakhs”.

She thought her wealth would naturally sustain itself. Then her tax consultant pointed out that her investment choices were bleeding money.

She was overpaying Rs 12 lakh per year in unnecessary taxes.

Her portfolio was filled with overlapping mutual funds that added risk without adding returns.

Her insurance policies were a messy picture—some too much, some too little.

She wasn’t losing money, but she was leaving money on the table—lakhs of rupees that could have been put to better use.

Reality Check

Financial planning isn’t about cutting corners—it’s about maximising what you already have. Wealthy families do not avoid financial planning. They embrace it. That’s why they stay wealthy.

Myth 3: “I Don’t Have Time For This.”

You have got back-to-back meetings, deadlines, and business travel. The idea of sitting down for hours, gathering data, and going through financial spreadsheets could be… exhausting.

But here is the trade-off: It is a few hours now or many a days/months and hassles later.

So this happened…

Arjun (name changed) a 48-year-old corporate lawyer had a slew of investments scattered across multiple schemes, PMS, stocks, bonds and with 5 different brokers / bank / agents.

We spent 4.5 hours over 3 meetings. Time spent by the team behind the scene: 3 hours.

Savings: Rs 1.75 lakh per year in reduced fees. Better-aligned investments to provide for liquidity when needed avoiding the need to take loans later. Alpha generation possibility of 1.5 per cent due to better asset allocation.

That is about Rs 45 lakh potential saving / additional earnings in a decade…

The question is not “Do you have time for financial planning?”. It is “Would you spend a smaller amount of time now or a lot more later and stress over it?”

Myth 4: “Excel Sheets Can’t Dictate My Life. Life Is Too Complex.”

Life is unpredictable - no denying. So should you go into it unprepared or with some plan for when things go in different ways?

There is a small chance that it will rain… so what’s the point in planning a picnic? Is that how it works?

No - You’d start with the assumption that it might be a bright, sunny breezy day and so you prepare your sandwiches and juices and head out. But you still carry your umbrellas just in case, don’t you?

Financial planning is not about predicting the future. But preparing for whatever might happen.

A good plan doesn’t lock you into rigid projections. It does two things:

It shows you possibilities—If you decide to retire at 55 instead of 60, what impact does that have?

It allows you to adapt—If a financial emergency arises, do you know exactly how you’ll handle it without derailing your long-term goals?

A financial plan isn’t about rules. It’s about having options.

Myth 5: “I’ll do it later.”

‘Later’ is the most expensive word in finance.

Deepak (name changed) always knew he should “get serious” about financial planning. But work, kids, and life kept him busy.

By the time he finally sat down with an advisor at 50, he realised:

If he had started investing Rs 50,000 per month at 40, he’d have Rs 3.8 crore at retirement.

But because he waited until 50, his projected savings had dropped to less than half of that.

The cost of delay is real. Waiting just five years to start investing can reduce your wealth by over Rs 1 crore at retirement.

 The best time to plan your finances? The day you were born.

The second best? Right now.

Key Takeaways:

•  High income doesn’t equal financial security.

•  Financial planning isn’t about cutting back—it’s about making your money work better.

•  A few hours of planning today can prevent years of financial stress later.

•  Life is unpredictable. A financial plan gives you control, clarity, and options.

•  “Later” is the most expensive financial mistake you’ll ever make.

Final Thought

You’ve worked hard to build your career. You’ve earned your lifestyle. Now don’t miss out on protecting it, because it is worth protecting. Added bonus - it is easily doable.  Financial planning will take nothing away from you— instead it will make sure you keep it all.

The author is a certified financial planner and co-founder and head of financial planning, House of Alpha Investment Advisors Private Limited

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)