All of our possessions come with a certain amount of risk. Greater the value of belonging, bigger is the loss incurred in case of a threat. Some losses can cause insurmountable disruptions which can take very long to recover. Consider the examples of losing a job or property. This can be better understood in the light of the current situation where major corporations are conducting mass layoffs leaving its employees in lurch. Risks can be reduced but never completely eliminated. Therefore, it is necessary to plan for risks in advance so that its effects can be minimised and you can return to normality as early as possible. Here is where Personal Risk Management enters in the picture.
Personal Risk Management is a process of developing a strategy to cope with the unexpected adverse events that can cause financial strain. It means planning ahead to protect your wealth, property and well-being if an undesirable happening occurs. Personal Risk Management is used in both businesses and personal finances. It includes mechanisms like insurance, savings, etc. Potential risks differ according to the type of possessions, income, expenses and lifestyle. For example, a person owning a house and car in India will have a different risk management strategy than a person owning the same in Australia.
Income risk arises when you are unable to produce the required amount of income to sustain yourself and your family. It can occur due to disability, death, unemployment, etc.
When expenses overtake income it is referred to as expense risk. It can lower your spending power further leading to financial hardships. Expense risk can happen when there is improper budgeting or in situations like salary cuts and inflation.
An asset is anything you own that has value and can be used. For instance your house, land, real estate, car, jewellery, bonds, stocks, etc. Various types of assets come with particular risks. Some common threats are theft, destruction, recession in the market, property depreciation, etc.
Credit risk crops up when you lend a loan that is not repaid within the time limit leaving you with less money. Conversely, if you are not able to repay your debts, you stand at the helm of default risk. Rising debts can create a pressure on you to repay the loans and reduce your spending power.
Savings and insurance are not your sole options for risk mitigation. Insurance may appear lucrative and simple, but you risk losing unnecessary money while paying the premium. There are many other additional risk management strategies. Let's take a quick look:
This includes avoiding choices that have a high risk factor. For example taking excessive risks in the stock market.
In this method you take actions to lessen risks or its impacts. For example employing cyber security measures or purchasing insurance coverage.
It entails taking on a certain amount of manageable risk and transferring the remainder to other organisations. For example medical insurance.
Here, you completely transfer the risk to a firm in exchange for an insurance premium. For example life insurance and liability protection.
As you might have already understood, risk management is a broad and complex area. It is a lengthy process of identifying the risks, choosing the correct mitigation methods and implementing the strategies. Therefore, it is advisable to take help of financial experts who can guide you in the right direction through their knowledge and experience.
Poshway’s client-centric principles and unrivalled expertise have earned the firm a dignified image in the finance industry. Our qualified and experienced personnel can assist you in quantifying risks and risk categories to make sure that you are not over or under protected. We provide comprehensive risk management plans for businesses as well as individuals. With our upgraded information base, advanced technology and deep expertise, we construct high quality risk management plans that lead you towards quick recovery with minimal impact on your wealth. We also advise you on related aspects like risk avoidance and reduction. Poshway’s finance specialists produce personalised plans by undertaking extensive research of your financial assets, investments and lifestyle.
Equipped with Poshway’s expert risk management plans, you can proceed towards your goals with confidence and peace of mind and achieve your dreams.
The risk management planning process consists of four steps:
Asset is a wide term encompassing all the physical and financial resources that you possess. Each asset has more or less risk associated with it. We study your assets minutely and enlist them along with their risks. Our team also reviews your existing investments and insurance to design personalised plans.
Once we gain a thorough understanding of your assets and risks, our experts delve into probable strategies to formulate an effective risk management plan. We quantify potential loss and evaluate protection schemes like insurance and savings. The proposed actions are laid out in an organised and comprehensible manner.
The plan is explained in detail in the consultation session. It is a one to one discussion where clients can clarify their doubts and put forth their concerns. The queries of the clients are addressed and the plan is finalised.
Risk management requires regular monitoring and adjustments to assess whether the plan is still relevant and if any improvements are required. Our team keeps a check on the devised strategies and suggests modifications if needed.
Planning for risks is crucial because risks are inevitable. Risk management enhances your resilience and secures you and your business against unexpected losses. Poshway’s comprehensive risk management strategies help you fight the adverse circumstances with confidence and emerge swiftly and efficiently.