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Investor Success Stories How Steven Fernandez helped a client buy his first home

How Steven Fernandez helped a client buy his first home

Did a client ever come to you just 13 years before retirement, saying he needs help with buying a house? Read on to find how Steven Fernandez of Proficient Planners, Mumbai, used smart cash flow management to help his client achieve his goals.
Team Cafemutual Jan 30, 2018

Until a few months ago, Ratnesh, 52, and his wife Vipula (names changed) had been living in a rented house. Ratnesh worked in a BPO while his wife was in the railways. Their combined salary was close to Rs.10 lakh per annum. Despite a good income and low expenses the couple had not planned for a home. And as time went by they became less and less sure of how to go about buying a house. They worried they may never have a house of their own. 

Ratnesh and his wife started planning for their first home in 2012, when Ratnesh was 47 years and had just 13 years left for retirement. Motivated by an article in a financial newspaper written by Steven Fernandez, Ratnesh approached him and sought his help to realise the dream of owning a house.

The sessions with Steven changed the couple’s approach to their future. The financial advisor made the duo realise they had to save for three goals: house, children’s education and retirement.

“On analysing his situation, I thought it will be best to focus on the cash flow. I got them to write down their expenses and gave them an alternative budget for the month, which they needed to follow. I asked them to set aside 60% of their income for their goals and the rest 40% for their monthly expenses,” Steven said. He then advised Ratnesh and his wife on how to go about investing their money “Of the total investible corpus, I recommended them to allocate 70% of the corpus towards creating a down payment for buying their first house by investing in ultra and short-term debt funds. They invested the rest of the corpus in ELSS and equity funds to fund their children education and retirement,” Steven added.

Explaining the rationale for this recommendation, Steven said that he felt that the client was running out of time. “He was already 47 and needed to achieve his goal of buying a house within 2 years. Further delay could affect his retirement,” he says.

Ratnesh and Vipula took his recommendations seriously. By 2014 they were able to make the down payment for their dream house.

And by 2017 the couple moved to their new house. Their investments towards children’s education and for retirement have also grown to a robust sum. This was possible because they kept on increasing the SIP contribution every year with the increase in their income. Gone are the days when the couple looked at the future with anxiety. With sound professional advice, which Ratnesh and Vipula followed earnestly, the two now look forward to a cosy retirement.

 

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