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Business News/ Money / Calculators/  In early career, financial plans can also be for short-term goals
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In early career, financial plans can also be for short-term goals

Sonika is a keen traveller and her two biggest demands from any investment avenue were: liquidity and that the returns be better than those of a fixed deposits

Photo by: Aniruddha Chowdhury/MintPremium
Photo by: Aniruddha Chowdhury/Mint

There is much that we all can learn from those around us. Sonika Mehra, a 29-year-old, who works with an international financial services company in Mumbai, learnt that her money had to do better. “When one is young and earning, we end up spending everything. It gets blown away," said Sonika. While she was saving from what she earned, the money was lying in her bank savings account. Sonika wanted better than that. 

Sonika was not convinced by bank fixed deposits and savings accounts. She wanted better returns from her money. “It was lying in the bank. I didn’t know where else to put it." 

In her search for better investment options, her first ports of call were the banks themselves. But she was not satisfied with the solutions that banks were willing to offer. “I had tried contacting banks but what they offered didn’t make sense to me. The money would be stuck; it wasn’t giving any liquidity," she said. 

Sonika is a keen traveller and her two biggest demands from any investment avenue were—one, liquidity, and two, returns that were better than those of a fixed deposit. “I love to travel and I want money quickly for that. At the same time, the returns should be higher than what banks give," she said. 

What she got from banks when she approached them for some investment products was not satisfactory on various fronts. Apart from being illiquid, “They talked in a very technical way; I couldn’t understand." That is when she decided to approach a financial planner in 2010. 

“Deepali (Sen; financial planner) explained things to me in simpler terms," said Sonika, who has been earning since 2008. “While I knew the broad concepts, I didn’t know the nitty-gritty," she said. 

Sonika’s main short-term goal is to travel but she also has a few long-term goals, which include buying a house (in Mumbai) and starting her own business.

But there are no time-related targets set for the long-term goals, as it won’t happen with young professionals early in their career, since most would not know where their work will take them. That is the case with Sonika too, except that she is—for now—sure that she wants to buy a house in Mumbai. “But I don’t know when this will happen," she said. 

Keeping her need for high liquidity in mind, Sonika now invests in short-term debt funds and arbitrage funds.

For longer-term needs, her money is now invested in equity mutual funds. Also, since she does not have financial dependents, Sonika has not increased the insurance cover that she currently has. At present, her life and health insurance are limited to what her employer offers. Sonika’s family is based in Varanasi, where her father works with a bank, and her mother is a homemaker. 

After having followed a financial plan for a few years, Sonika now feels more secure financially.

In fact, she wonders why others who are in the same income category as her and with similar circumstances, don’t have enough savings and investments.

“When I look at my friends, many of them are often borrowing money. Their funds are insufficient even for short-term needs and they have to borrow," she said. Thanks to her financial stability, Sonika has been in a position to lend to some friends. 

In the past few years, Sonika has been able to indulge in her passion for travelling—she has visited Thailand, Dubai and London and also goes on two-three domestic holidays a year. “What I would say is, get external advice," said Sonika, even though she herself works with a financial services company and could take the advice of her parents.

“But I prefer to take my own decisions. I have even asked a couple of my friends to go to a planner and take some help. I feel that a financial plan allows us to do whatever we want," said Sonika.

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Published: 23 Apr 2017, 08:03 PM IST
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