Bengaluru-based couple Sunayana Sitaram and Sandeep Prakash were always interested in finance and were investing on their own—Sunayana while finishing her PhD, and Sandeep in the early phase of his career. But both felt they were not making much of a headway.

“Over time, we realised that we were not best equipped to study the market and were not suited to analyse products," said Sandeep. Sunayana was particularly conscious of the need to manage money as she joined the workforce later than most owing to the time that completing a PhD takes. When she started working, she felt “it was time to be serious about money". 

What they needed was unbiased advice, and their search led to Melvin Joseph, a Sebi-registered investment adviser and founder of Finvin Financial Planners. 

Initial steps

Sunayana and Sandeep felt they needed in-depth understanding of various financial products, but they had not given much thought to why they wanted to invest. It was when their planner asked them to try and articulate what they wanted money for that they arrived at major financial goals. “We had vaguely thought about things like retirement and children. Speaking to Melvin helped narrow down goals," she said. 

Among the first things they learnt was to connect objectives to investments, rather than just returns. “When you are planning for somethings that are 5 or 10 or even 50 years down the line, you have to think of more than just how much money to put in," said Sandeep. Their planner’s questions nudged them to think of details such as timelines. “Deciding things like I want to buy a car in 5 years, or saying that my kid will go to college in so many years, is quite an effort," said Sandeep. 

The couple was able to narrow down to a few important financial milestones, including buying an apartment for Sunayana’s parents, upgrading their own house in 5-6 years and buying a car in the near future. Further away were child’s education and marriage, and their own retirement. “I wanted a prediction regarding my income when I want to retire (or partially retire)," said Sandeep, adding that he has a keen interest in farming. They have, in fact, bought a piece of land. 

A look at their prior investments revealed some gaps. For example, the couple had a few unit-linked investments plans (Ulips), which were not serving any purpose. “Melvin said we should separate insurance and investing. Even if we pay 20,000 towards insurance, it is not being chopped off from investments. The separated investments would still give much more," said Sandeep. To start with, premiums for Ulips were stopped. They realised that for the same amount, a pure term plan would give a much higher cover. They are also in the process of finalising a suitable health insurance plan.

They had also invested in some bank fixed deposits without realising the taxation angle. “For the 30% income tax bracket, fixed deposits are not tax efficient," said Sunayana.

For long-term goals, investments are in systematic investment plans (SIPs) of equity mutual funds. For a house for Sunayana’s parents, they are investing in debt funds. 

Moving forward

Having a plan has taken the guess work out, said Sunayana. “I feel relaxed. I know that as long as I do this, I will be fine," she said. Sandeep feels that having a trustworthy adviser helps them look at factors that they wouldn’t have thought of on their own. “We would not have had the time to study all the factors," he said. 

Mistakes I won’t repeat

1: Won’t buy Ulips

2: Won’t ignore tax efficiency of investments

3: Won’t invest before studying a product