On a Sunday morning, the Bundelkhandis are in a laid-back mood, mirroring the ease in their present financial life. Weekends are when their one-year-old son, Anay, makes up for the absence of his working parents the whole week.
The dream of owning a house is what got Uday Bundelkhandi to cross the bridge of friendship and seek professional advice from his long-time friend and financial planner Suresh Sadagopan. “I started investing from the day I started working and as a friend, Suresh always advised me when I sought him out,” says Bundelkhandi.
Then what made him take that extra step of formalizing a plan? “When my wife and I decided to buy a house, we realized that the houses we liked and matched our needs and specifications were a little beyond our reach,” says Bundelkhandi. The couple realized that they would have to wait for at least two or three years before buying a house of their choice.
Photo: Ashesh Shah/Mint
Bundelkhandi was 30 then and was at the peak of his career. “It was at this point that I sat back and did a reality check. I realized that 10 years later, I may not be at the peak of my career.” He realized that it was time he got his act together on planning his finances and sought Sadagopan’s help.
Being investment-savvy, saving came naturally to him. But when he went for professional help, he learnt that there was a lot more to investment than maintaining a record.
Lack of clarity: His earlier investments were ad hoc. There was no clarity on the purpose of investment and the target returns. “Although I invested on a regular basis, there was no system to it.”
Limited resources: As he rose in his career, he was left with little time to look after his savings and investment pattern. “Earlier, I used to check market movements 10 times a day, but gradually the frequency came down. I now take a look once in a few months,” he says.
He also felt that he didn’t have the expertise to read the fine print.
No professional help: Bundelkhandi relied mostly on agents while investing. Little did he realize that they had only limited products to offer and some of them even had limited expertise. “When I look back, I realize that everyone needs a specific investment plan to suit their needs. The agents have limited options to offer. A financial planner has no affiliations and, hence, offers avenues customized to your needs.”
Insurance needs: The planner advised him to segregate his portfolio into insurance and investments. Earlier, he had unit-linked insurance plans, whole-life plans, money-back and endowment plans, which he treated as investments. “The key was to first cover yourself adequately,” says Bundelkhandi. So, he switched to term plans, which offer the simplest and cheapest cover. Investments became more focused, thereafter.
Goal clarity: Bundelkhandi is now clear about his investment goals. His targets are sharper. The financial plan has enabled him to make provisions for early retirement without a need to compromise on his current lifestyle. Also, he is confident that he will provide adequately for his son’s financial needs in the future.
Mature and long-term planning: He now practises what is called scenario planning. So, if his wife decides to take a break from her profession—temporary or permanent—the family’s finances will not be affected in a big way.
“It was important that I planned for such a break as jobs today are not like good old government jobs,” he adds.
Financial planning coupled with the right career jumps and personal decisions helped him realize his dreams.