Exhausted and tired from long day at office and travel, Amit Kumar went to sleep wondering if this is life that he will live all through. He dreamt of his childhood days and all that he could enjoy doing it. He remembered how he was good at telling jokes and doing performances in school and village programs. His wild imagination saw him doing what he loved and making name for himself. Though he earned decent enough he was happy doing it. He liked living in serene countryside in the beauty and solitude of nature. But suddenly his dream was broken to reality as his wife woke him for sleeping late. Fortunately, it was week-end and he kept wondering if he could live his dreams.
- My returns have come down
- How long will this continue
- I want to stop my SIP
- I want to restructure my portfolio
- I want to close my investment account
Since last six months, with the market trend & big swings (up & downs), we all are getting these thoughts. Everyday when we hear new stories, our thoughts get compounded further, what do I do now?
The recent news of 23-year young Captain who laid his life while fighting on the border moved my heart. Their patriotism and the willingness to risk life for the nation is commendable. This emotional fervor for them last for few days and then the reality of life dawns on their family. As a financial planner I was wondering about their families and whether they plan their finances.
Our international flight landed at Mumbai airport and I heaved a sigh of relief. I was irritated by Long sitting hours, headache, temporary deafness due to air pressure, booming noise, turbulence and last but not the least-fear of crash. While exiting the plane, a passing thought came to my mind- if air traveler goes through all these what about the staff especially the Air pilot who do their job day in day out!
Beyond the excitement of flying the plane, a Pilot’s career means odd working hours, medical issues, mandatory retirement age and job uncertainty due to airlines going bust.
Mr. Joshi, a senior citizen is worried man today. His income from FD has been getting less by the day and on other hand monthly expenses have been rising. To add to the worries are the rising medical expenses. For the generation that has retired in last few decades, retirement pension or interest income from FD was the income support in old days.
Changing times call for different approach. A good mix of fixed income and market linked products is the answer to ensure optimal investment returns. Investing Rs 15 lakh in Pradhan Mantri Vayu Vandana Yojana provides assured return of 8% with monthly income of Rs 10,000.
Investments in debt and balanced funds schemes can give higher returns and better protection of capital. These investments are tax efficient if invested over three years. A small exposure to equity mutual funds over 3-5 year horizon can provide for capital appreciation. The increased returns should also be used for having adequate insurance cover to meet medical expenses. A small sum in liquid fund for emergency needs can take care of any contingency.
The recent news of Bank scams and huge losses incurred by banks are making the common man jittery over the safety of one’s hard earned savings. Bank FD is the most natural option used by salaried class to park their savings to provide for the future needs. One, because the nationalised banks are owned by the government and its was indirectly a guarantee that your funds are in safe hands. Whenever there has been a doubt about the viability of a Bank, RBI has stepped in and ensured safety of investor deposit by merging of weaker banks with the stronger ones. Let’s have a look at the regulatory provisions to know how safe your deposits are.
Bank deposits in value terms are insured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC), a wholly owned subsidiary of the RBI. The deposit insurance covers all commercial banks, local area banks, regional rural banks and cooperative banks. You should be aware that only Rs 1 lakh of your savings is insured. This limit has not been revised since long. As an investor you should also know the worst-case scenario in case something untoward happens.
Quote from a merchant navy sailor: *
“If one has a bucket list, sailing on a merchant ship should be on it. It gives you the perspective of what is it like to witness the spectacular grandeur of 3/4th of our planet in a ship’s setting. The experience is very humbling.”
Sounds exciting… but other than missing the family life, there is a big-gap in terms of financial planning, investments& execution. More so with the fact that, half a year (or more) they are sailing, without having any access to the advisors, markets or simply, how to manage their finances?
We have always seen our mothers on the front-foot, towards managing the house, family, husband, kids, or virtually everything in the house. Also referred as a “Tiger-mom” towards handling kid’s education, other activities, with a selfless motive, to ensure that kids just excel. And the story continues,with our dear spouse as well (wife). 😉
But when it comes to finance or investments, they just give it up, either it’s the father, or the dear husband, who becomes the driver on managing investments.
But I still recall, whenever one need handy cash or some contingency funds, pop comes the money, mostly as cash or some unknown Bank FD/ deposit.
A right financial planner is the doctor of doctors!
Doctor’s duty is to understand the patient’s problems, diagnose it and then provide the right medication or solution to them. But when it comes to their own financial planning, do doctors go to a financial planner or a financial doctor? I randomly spoke to my doctors & their friends, outcome was startling… as none of them have a financial planner.
After reading an article by Carl Richard, “The Behaviour Gap” … Investing is not about skill, but about behaviour.
From his article, Quote … “Even by owning an average mutual fund, investors who behave correctly can outperform 99% of their neighbours. Alternatively, for investors who spend their whole lives searching for the best investment, an entire lifetime’s return can be wiped out by one single behavioural mistake.” Unquote.