O Womaniya… Jee le Zaraa

 

“Every day I wake up, I long for a small break for the coming weekend. With a toddler to manage and flourishing business to care for, every small break makes me feel awesome. However, the reality strikes too soon to wake me up thinking how will I meet my expenses for my vacations and more relevantly my living expenses. I mean yes my spouse is earning good for us but what I am talking about is the icing on the cake -- my earnings which is now not there. My income cycles are irregular now. I miss my independent earnings”. Sounds like a familiar problem? Yes, every women going through midlife professional sabbatical or pregnancy pause can relate to it. What we would discuss today is what you can do to avoid such situation in case to avoid possibly lost individual earning capacity.

Plan your break well – decide on the time you want to take a break for. If it is for a temporary health break then it is wise to talk to the company HR for giving you a short term sabbatical. If you want to take a maternity break then it is best to talk with your spouse and your immediate regarding the likely time to resume work. The main purpose of this planning is to ensure that you save sufficiently well for your interim contingency funding. Also, if you don’t wish to resume work for a short time then it is best to re work your personal cash flow to understand the discretionary components that can be discarded.

Make a note of all your upcoming major expenses – be it any health consultation, surgery or general hospitalization. Make note of all of these expenses. Also, if you intend to travel in the break it should be planned well in advance to avoid any huge cash crunch later. These funds should be beyond the basic safety required to be maintained by you. Also it will make your spouse tension free about shouldering the responsibilities single-handed.

Continue your individual investments – all the savings ongoing for future goals should be continued without any inadequacy in it. This should be taken at the time when you are still working. If you want to transfer the funding from your joint pool with your spouse then make necessary bank transfers regularly. Also, never miss your life premiums as it is necessary to continue your life cover.

Keep your personal expenses self sponsored – make your personal lifestyle expenses self sponsored so that you don’t have to compromise on it. Let it be well calculated to ensure that your grooming or lifestyle expenses don’t compromise anywhere. Also, please don’t make it too overstretched to make you feel bonded to fulfill it.

Support your family goal funding – if you have decided to retire from your active work life, then plan this retirement well in advance. It is necessary to ensure that your family goals are not hampered at any cost. If your family goals need you to support a little more then try to figure a mid way to balance your expenses and earnings.

Saarthi supports women’s financial literacy and independence. We look forward to get more female clients planning for family goal fulfillment. It is necessary for women to play an active role for family financial welfare. But this should not hamper their own dreams and goals. Be a bird, carrying your own weight and be you own anchor.

Thanks and Regards
Team
Saarthi Financial Planners
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Email: saarthifp@gmail.com

Plan your longevity..

One of the important premise on which retirement planning is undertaken is calculating life expectancy. Above all things only death is certain and inevitable. But at times, death may delay its plan and life takes a new turn and leaves you with multiple queries. We encountered many such queries from our clients in our recent interactions leaving them with a thought if they have really saved enough. As a financial planner we calculate the corpus considering all cautious return rates and highest inflation rates. But at times, these calculations also can fall short to actual life.

So if you face a situation where the actual life span exceeds your expected life calculations, then it is wise to take a precautionary move a few years before the D day. So here are few things we suggest to modify the existing planning.

a)   Seek exposure in Equity – Whenever you devise plan for retirement ask your advisor to recommend some component investment in equity. Equity is useful tool for capital appreciation. If you are currently retired then seek to reshuffle your portfolio with partial exposure in equity. But give it tenure of at least 5 years. Also, seek funds which have smaller AUM as it gives scope of fund improvement.

b)   Don’t fight way to reduce expenses – Retirement is rightfully called as golden period and it will be wrong to cut short your expenses to meet the survival. Also, it is not just about surviving it is about living this time. If you need to add to corpus then always look towards your net worth. Fight out the unproductive assets like jewels, or expensive art. If you had planned to pass it on to next generation for lineage fame – leave the glossiness and get practical. 

c)   Be frugal and not a miser – there are many times that we have hoarded things around which are not of any actual use to us. So it is time to get a junk sale arranged for it. It would save you the pain of getting any additional space for preserving it and also arrange for some quick liquidity. It is not a long lasting solution but a temporary fix. 

d)   Rejig your inheritance plan – beyond your love and care, all that your child gets depends completely on your own wish. So, if life has altered its plan then even you need to make the necessary tweaks in your thinking. It is not necessary to leave back all your created wealth for your children. Let them feel the heat and struggle before you put them in a comfortable padding. Figure out all the usable capital market instruments that you can you use with regular income generation if possible without harming the capital invested. Like try dividend mode over growth or interest payout or start to make your 80C investments in ELSS over PPF. 

e)   Use lifelong annuity – Annuity payments are ideal for regular income when one is not making regular money. So whenever you buy an annuity program from any insurance company ensure you select the mode of lifelong annuity in it.

We would just like to conclude that every situation that seems like a dead end pans out into a new adventure ahead. So, keep watching for that blurred light of hope in your difficult situations. Also, a plan can be modified at any level 

Thanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com

Nurture your Investments

The recent victory of the ruling party over one of the largest state is no less win then the overcoming the cli9mb of difficult Everest ranges. This win is not simply a win of majority but it also shows that now people want to give a chance to new people and move away from their comfort zone. News, rallies and speeches now do not attract people, they want results. This midterm victory of our PM’s tenure is a clear reflection of how people now believe in the decisions made the commander in chief of our country. It all started with parties canvassing, leaders speaking and tarnishing image of the other one. All said now is the time to perform. But again it is not a task of few days or months. It requires continuous efforts till the things really change. Apparently when we talk of our investments, we also follow the old dictum “Start, put the vehicle in 1^st Gear and as soon the vehicle picks up speed move to 2^nd gear. As the road gets smooth keep on shifting the gear”. But what we miss in this high is that the road can even get bumpy and the ride needs to be made slower and safer to cross these roads. So, why am I today discussing so much about these things that we already know or read every day in our morning newspapers? What is the need to reiterate the multiple times repeated stories? Well to begin with is that if you know them then why don’t we apply it? Apply it in our personal decisions – be it personal life or financial decisions.

Yes, we at Saarthi, want our readers to first improve their financial common sense before they plunge into analyzing and judging Ratan Tata and his personal investments. Why do we make statements on what Narayan Murthy comments about his peeve subject? Yes the very common thread that underlies in all my above comparisons is one point – Give time to your investment and wait for it to do the best. However, if you don’t see what you expect, don’t pluck it rather take utmost care of it and efforts to let it survive the rough times. As any leader needs time to prove his vision and efforts or every car needs to adjust to the road bumps so does the investments need time and still belief in its merit to survive the time tide. If you believe the invested asset class then it should not be difficult to understand the reason for its bad performance. It not only applies on variable earnings of products but also on fixed earning products. Any positive news should not make you turn towards any specific product nor should it make you move away from it. Before you leap to make any decision take advice on it to double check strength of your action. Be sure you don’t turn to machines and TV commentators for this. Use somebody like your personal advisor, to give you an honest opinion.

All said it is good to be patient with your investments. It may be able to survive your ignorance but cannot face your harsh decisions. So, always never fear to take a chance. “Chance is always second last.” If you don’t believe me then just think if all options were 100% then would there be any word like “Probability”

Thanks and Regards
Team
Saarthi Financial Planners
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The heart of gold

Many times my father becomes subject to my mother’s annoyance over his out of way help towards unnecessary people. It is surely a noble thought to help someone out of his problem but at cost of oneself is not advised. Even when you travel by flight the attendant very clearly says, “In case of lack of air, first wear your own oxygen mask and then help others.” Of course it is not to stop anyone from helping others but always your safety gear on. Even when one company comes over to takeover another company it comes with an agenda to ensure its profit and success. Hence, if you are in line of this social service too then be careful. Hold your horses become you spill over your entire finances over others. Sometime it is better to tread slowly rather falling over long run. Today, we would discuss a few pointers so that you can balance your heart and head well.

a)   Block your funds- it is best left to earmark a fix amount of funds you want to spend on your public chivalry. It would help you understand the line to tread further once you reach the threshold. Also, the limit will give you a head count of your efforts provided. 

b)   Donate only to known- Every big charitable trust that sponsor the needy people, conduct a primary research on the people they help. So, when you do so at personal capacity, it becomes imperative for you to study well the person you trust your money with. So, follow the simple dictum of helping only your known acquaintances.

c)   Prefer the mortgage route- Although, you might not really help someone with the intention to get back your funds, it is always preferred to take a mortgage against the loan. It is not to pressurize the lender but to ensure that he works in good faith to return the funds. 

d)   Form a public trust – in case if you want to engage in regular activities of charity and monetary help, it is better to form a public trust. It would give you an additional leverage of tax benefits and other savings.

e)   Bring your family in confidence- never indulge in secret act of funding any individual without making your family aware about it. If the times change, then this lent money could also give them some relief for survival. 

Just summing up, our discussion we would just like to say that although unconventional lending is very popular in India it should not come at the cost of your financial goals.    

hanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com