It is been a week since my last post. And seven days zoomed past faster than a racing car. Does it sound familiar? Yes! Work, cleaning the cupboards, car servicing, taking that online course,.. all are planned in the mind but there are so many things to do in life that many of these take a back seat. It would not need a psychic to tell which activity comes is thrown under the backseat only to be discovered once in a year – financial planning!
Insurance premiums are paid late, mutual fund investments are deferred, child plans are delayed because the baby is too small, and as for retirement there is always another day to plan. About thirteen years ago, when I started to work in the competitive Information Technology Industry, I was once told by my manager that execution is a tad more important than planning. He argued that we can make all sorts of plans, but only when we execute or start executing, do we realize how difficult the task is and often we run back to the drawing board.
In the secrets of the “The ₹ 1 Crore Target in 10 Years” let’s try to answer this question honestly – “Have you planned your retirement?” “Have you taken informed decisions about your child’s future?” and “Have you followed the investment decision?”
The answer is often a resounding Yes! And ask how? Some bank agent pestered and sold an insurance policy or a market linked child plan. Or a friend who claimed to make millions trading penny stocks? So even if you possess a policy or a financial investment instrument, have you had the time to take a look at its performance, ie have you executed the plan correctly? Did you really plan to have that instrument and track the performance?
For many, this is the problem to not reaching the “The ₹ 1 Crore Target in 10 Years”. Lack of planning, and more importantly, lack of follow-up on investment performance. The reason is obvious. Financial investment does not hurt you immediately – the poor insurance cover that you took does not hurt you until a misfortune strikes. The insufficient retirement plan does not depress you until you hit the age of about 60. Until your market linked child plan makes you look like a kindergarten kid in front of your grown-up child, you would lived in an Utopian fantasy that your child’s education is secure.
Financial planning is not just about putting your hard earned money in some random place. It is a serious exercise that when executed properly will help you gain control of your financial success and hence, enable you to achieve your goals – children education, vacation, a 4 month break from office and that elusive world tour.
It is important to spend time deciding your goals, your financial health and make plans and research on available financial instruments. If you feel the information round you is overwhelming, do not hesitate to take the help of a SEBI RIA – feel free to sign-up on http://finvestor.in and ask your financial queries.
So Step one to “The ₹ 1 Crore Target in 10 Years”, close the FB app and spend time collecting information over the internet about financial planning. There is a reason why SEBI is pushing for fee based planning offered by RIA instead of commission based selling by commission agents.
The Author, Krishna Rath, is the founder of Finvestor.in, a place for financial investors to get their answers on what and where to invest. Krishna is an MBA from IIM, ALMI from LOMA and is a SEBI Registered Investment Advisor (RIA). He was worked with several financial firms in building critical information systems and now has taken up the challenge to build systems around financial planning for investors.
Bhoi Smrutirekha Dharanidhar