Dentist couple Swathi and Satish Menon wanted a financial plan so that they could focus on their work, while their investments took care of their goals
Satish and Swathi Menon, who are both dentists by profession, were at the starting line of many things about two years back. Satish had just finished his Masters in dentistry, they were newly married and they had started their clinic in Navi Mumbai. This is when they felt they needed proper advice on financial matters, specifically on how to expand their clinic.
“We are self-employed so we don’t have things like PF (provident fund). We needed some direction for (our savings)," said Swathi.
Their search for a financial planner first led them to those who “sell their (own) products". Then they came across someone who wanted an upfront fee and was also selling products. This is when the Menons felt the need for a fee-only planner.
Swathi and Satish didn’t have a lot of investments to start with. They also weren’t sure of what goals they had. They knew they wanted to invest through mutual funds, but that’s all.
Melvin Joseph, the couple’s financial planner, started with their goals. “On the professional front, we were clear. On the personal front, we had a vague idea," said Swathi. The couple’s first goal was expanding their clinic, which they wanted to commence immediately (this is already happening), followed by buying a house in 3-5 years.
They had not thought of retirement. “Melvin said we should not postpone retirement planning. He said while focussing on short-term goals, we should also plan for long-term goals," said Satish. After putting some thought to it, Swathi and Satish decided that they would like to retire at the age of 55-60 years.
But they didn’t know how much will be needed, where to invest and how much to invest. “We were shocked by how much would be needed," said Swathi.
Since Swathi and Satish are working on their own, personal accident cover was recommended. “We had not heard of this before," said Satish. They have also enhanced their life insurance and have separate term plans. Swathi had a unit-linked insurance plan (Ulip) and they continued with it because most of the premiums had already been paid. They also enhanced their existing health covers.
For investments, the couple had been mostly dependent on fixed deposits. A major change was moving to mutual funds, including equity-linked savings schemes (ELSS). “(Since we don’t have a salaried job), our income is not the same every month. So the SIP amounts could not be so big that we can’t meet the requirement," said Satish. The initial investments were in lump sums. “Eventually, they became SIPs," he added. Now, lump sums are invested on top, whenever available.
Any surplus that Swathi and Satish had was getting reinvested into the clinic. They were advised to separate their personal and professional finances. “We have now struck a balance," said Swathi.
The couple also likes to take short trips, and this has been incorporated in their plan.
Plan of action
Swathi and Satish feel the biggest change they see in their finances, and even themselves, is that savings and investments have become structured. “Earlier, we were just going with the flow," said Satish. Setting down goals made things clear. “We now know how much we will need and how far from it we are," said Satish.
They were advised to keep track of where their money is. “We don’t have that much invested as of now, so keeping tab is easy," said Satish.
Overall, they realised they will have to invest more, “It’s for our gain, so we have have no option but to do it," said Satish.
The major difference, according to them, will not be a lifestyle change but putting money in the right place.
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