Sometimes a chance meeting can be life changing. For some investors featured in this article, their first meeting with the financial advisor helped them realise their investment mistakes. Working with their advisor, not only did they correct their course but started investing better to fulfil their goals.
Yeh hai investors ki kahaani, unke advisors ki zubaani (These are investor stories shared by their advisors)
Amol Joshi, Plan Rupee Investment Services
I met a retired couple at an event three years back. Both partners were ex-bank employees. Combining their long-term investments and provident fund, they had accumulated savings of Rs. 1 crore at the time of their retirement. The couple used to invest all their savings in bank FD. Their monthly expenses were around Rs. 45,000. Assuming a return of 7% on their investment kitty, they were confident that they would comfortably manage their monthly expenses and fulfil their dream of visiting a new country every year.
However, they were in for a rude shock when I reminded them that they had not factored in inflation in their calculations. They soon realised that their monthly expenses would double in approximately 10 years due to inflation. Thus, their current strategy of investing in only bank FDs would not help them fulfil their goals.
I recommended the couple to follow bucketing strategy to invest their retirement corpus i.e. creating a separate investment bucket based on duration.
First of all, I advised them to invest 25% of their corpus in liquid funds to take care of their daily expenses. Another 25% in balanced advantage funds for medium term goals such as holidays. While I recommended them to invest the next 25% in aggressive hybrid fund, the rest was kept in equity funds for 15 years to reduce longevity risks i.e. outliving your retirement corpus.
Following my advice, the couple have already toured two countries and are planning their third trip this year.
Suresh Sadagopan, Ladder7 Financial Advisories
An investor scheduled an appointment with me one day. He was in his mid-forties, earning a healthy salary of around Rs. 4 lakh per month. Despite his high salary, his monthly investments were just Rs. 50,000. Moreover, he did not have a loan or any major financial expenses. Though he had built up an investment corpus of Rs. 1 crore, I knew he was underutilising his investment potential.
On probing him further, I realised that his philosophy was “When I have enough money, why do I need to worry.” This fuelled his habit of giving expensive gifts to friends, maintaining a lavish lifestyle and lending money to his friends and family members. I made him realise his mistakes and encouraged him to save more.
By following my advice on expense management, he started saving Rs. 2.40 lakh every month. Investing that money in a mix of equity and debt, we were able to nearly double his investment kitty to Rs. 1.8 crore in four years. This encouraged him to invest more money with me. Also, he takes my opinion before making any major financial decision.
Deepali Sen, Srujan Financial Advisers
A young man shared his dream of being an entrepreneur with me. He had a 25-year home loan. I asked him to first prepay his home loan to pursue his entrepreneurial dream as I knew it was important that he should not have made him realize any financial liability in the absence of regular income.
After carefully analysing his income and expenses, we arrived at a plan to repay the loan early. He redeemed some of his investments, cut his expenses and increased his EMI so that he could repay the loan in three years. Today, he is happily pursuing his entrepreneurial dream without financial worries.
