Investing with Purpose – Making Informed decisions for long term Financial success
Yogin Sabnis
I Help IT Industry professionals Build a Financial Plan To Replace Their Financial Anxiety With Financial Peace | SEBI Registered Financial Planner | Author | 40 years experience in Financial Wealth management
Mr. Joshi is one of my clients whom I first met when I was conducting a financial planning workshop with a leading IT firm. Aged 45 he had a steady job, paying him well, he had a home, two kids and in all terms what we would say - Settled and happy! I offered him to meet me in office to have a chat and a cup of tea.
Mr. Joshi obliged and came over one afternoon. Our conversations started with the usual discussions on weather, politics, and other stuff. Eventually we got to down to talking about Mr. Joshi’s finances. “This is the Life Insurance policy I took for tax saving five years back from my wife’s cousin, the young boy had just started his agency and I wanted to oblige” he said. And what about your health insurance? I probed. “My employer provides me with the necessary health insurance.”
9 out 10 individuals whom I meet on an everyday basis, have the same story.
They are good professionals working in secure jobs and have made investments and saving decisions as and when the need arose. Some of the driving reasons are -
·??????? A relative sold me an insurance or an investment plan – told me the returns will be good and I wanted to oblige
·??????? It was that time of the year when I would rather invest than get tax cut from my salary.
·??????? A colleague told me he invested in this scheme and got almost 30% returns and I had money lying in my account so I decided to invest.
After careful review of Mr. Joshi’s portfolio, I realized there were some obvious loop holes.
1.????? He had no emergency funds for any contingency
2.????? He had not planned for his retirement and he worked for a private organisation which did not offer any pension
3.????? His health insurance did not have adequate cover and in fact Mr. Joshi had no clue of medical insurance cover he had.
4.????? Most of the investments he had made, were performing at an average of 10% and the returns were taxable at maturity!
5.????? He had credit card debt which he had taken for the new fridge and washing machine and because he had got an EMI option. The rate of interest on this debt was over 27%
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With a heavy heart I had to break the news to Mr. Joshi that despite his steady well paying IT job and his investments, his finances were far from “being in settled and happy state”.
Savings and Investment decisions need intentional and well thought planning!
Money is the driving force which helps you realize your life’s dreams and goals. Money not invested or saved methodically can also lead to a lot of unhappy life problems. Imagine Mr. Joshi who has lived a life with self-respect and dignity has unfortunate illness and cannot continue working and needs to now depend on his relatives/friends for his daily needs! Mr. Joshi is an excellent IT professional however when it comes to his money, he is not making sure his money works as hard as him.
Investing money and creating wealth is the underlying way of ensuring you have a happy secure life. Therefore, it’s not called financial planning, it called Financial Life Planning. Making investment and saving decisions on ad hoc basis without proper guidance is a sure formula for failure.
How can you ensure your money works as hard as you do?
1.????? Set financial goals
2.????? Take guidance and advice from knowledgeable licensed Financial Advisor who have mastered the art of creating customized financial plans.
3.????? Be honest and committed to “YOUR” Plan
Saving and investment decisions need to be prioritized and deserve professional guidance. In conclusion, Financial Life Planning is crucial for ensuring a secure and happy future. Mr. Joshi's story is a reminder that even well-paying jobs and occasional investments do not equate to financial stability. It is about making intentional, informed decisions that align with your life goals.
Work with a specialist!
A SEBI-registered Financial Advisor (RIA) brings extensive experience to help clients navigate their financial journey. They work with clients to set clear financial goals, create customized plans, and ensure that their money works as hard as they do.
Invest wisely, plan diligently, and live happily.
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