Profession: senior executive in a private sector company
Name: Nidhi Jain Seth
Financial planner: Amit Kukreja, founder, WealthBeing Advisors
Nidhi Jain Seth and Rohit Seth lived in the present. But when they started to think of the future, they realised they needed to save and invest better.
“I am an impulsive guy. I bought a (Harley Davidson) Fat Boy on impulse," says Rohit. “We were sleepwalking (in our money life). We liked it; we spent on it," adds Nidhi. The Gurgaon-based couple earned well and mostly spent as they wished.
But when they decided to make future plans, they woke up to certain facts. Rohit wanted to be his own boss before he hit 50, but the couple did not know if Rohit could ‘retire’ when he wanted to. They did not know if their current investments could let them retire or sustain their current lifestyle. “I wanted to know when I could ‘retire’. How quickly this would be possible. And if this could or could not happen," says Rohit.
Rohit doesn’t “want to work for someone else" forever. “At some time, we want to be able to do what we like," says Nidhi. Being in the private sector, the couple knows there won’t be any pension. “I was a little insecure about this," says Rohit.
The couple had a lot of their portfolio in real estate, an illiquid asset. “Amit (Kukreja: the couple’s financial planner) showed us that in some of the real estate investments, the real rate of return was in the negative," says Nidhi. During the recent slump in realty, the couple learned the hard way that they could not liquidate their assets at the price they wanted. “Some 8 years in real estate. All wasted," said Rohit.
Their over-exposure to real estate has reduced considerably, and the portfolio has been rebalanced. “Earlier, I didn’t know that mutual funds have to be balanced between equity and debt," says Rohit. Nidhi, too, was averse to investing in mutual funds because of her father’s bad experience with the product many years back. But she is now convinced of its advantages. “Now most of the money is in mutual funds. Initial investments were in lump sum, and then SIPs (systematic investment plans)," she says. The couple has also controlled their expenses. “Amit asked us a long series of questions," says Nidhi. “We didn’t know how much we were spending. Some expenses were stupid," adds Rohit.
The couple’s portfolio has been re-balanced so that the proportion of real estate has reduced and their investments in mutual funds fetch them better returns.
“I have become much more conscious about spending and saving. This has also crept into my business—I think about increasing my own salary," says Nidhi. “I have become more conscious about evaluating things and being sensible. I ask if I have the budget for it," says Rohit.
The double-income-no-kids couple feel they are now headed in the right direction.