Believe in simple living, high thinking; in life and in investments
In an environment in when even government-backed financial products don't give high enough returns, Bhadresh and Sapna wanted stability in their plans
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Bhadresh Rami was doing his post-doctoral research at Stanford University, US, when the sub-prime crisis of 2008 struck. This has in some ways had an effect on the way he views his finances. “There is volatility in the world; things are very fluid. I was searching for plans that incorporate financial stability,” said Bhadresh. He had interacted with some certified financial planners (CFPs) there, and brought some of the learning back when he returned to India. “It’s like going to a doctor. Give me a final solution; not options. I didn’t want confusing replies from experts,” he said.
He was clear about the kind of adviser he wanted. “I wanted a continuous and regular interaction; not once or twice a year. I also wanted ‘fee-only’ CFPs because they are unbiased and have no vested interest,” he said. Bhadresh and Sapna are both “thrifty in outlook”. But they found an “HNI bias in some planners,” said Bhadresh.
They found a compatible adviser in Melvin Joseph, who they found unbiased in recommendations and helped them form a clear plan of action.
The initial consultations involved long discussions on the Ramis’ needs. This was followed by them having to fill an “exhaustive form”. “This made us think of our priorities,” Bhadresh said. The couple’s top concern at that time was their children’s future—their elder son, Sanjay is 8 years old and the younger one, Adarsh, is 5 years old. But the “360º discussions” drew their attention to other things as well, one of which was retirement. “He (Melvin) pointed this out and explained how much the cost of living would be due to inflation 10-20 years from now. This made me more sensitive (to retirement planning),” said Bhadresh.
Along with this, they also understood the usefulness of compounding over the long term, and the need to have equity investments. “Earlier, all investments revolved around bank fixed deposits and some banking products like Ulips (unit-linked insurance plans). I could sense that the returns were not good, but I was only investing just for tax benefits,” said Bhadresh. But after understanding how some other financial products work, he got over his concerns related to equity markets.
Among their other financial goals is buying a house. “But this is an emotional decision for us. For us, a house is not an investment option. When we buy one, we want to live in it,” he said. So, until they have clarity on the location, the couple has decided that renting is better for them.
A longer-term personal aim for Bhadresh is to become financially independent and fulfil his responsibilities so that he is able “to devote more time to my spiritual needs. I need some time and resources to meet the other goals. But this can’t be when I am 60 or 70 years old; it has to be sooner,” said Bhadresh.
Once the major goals were decided—children’s education, retirement and buying a house—the next step was to choose appropriate investment tools. “Fixed deposits were no more an option; the returns are not above inflation. I have also put a complete stop to banking products. Our portfolio is diversified now—it has equity and debt investments due to the goal-based planning,” said Bhadresh.
The Ramis are not fond of pomp and show. “Simple living, high thinking. This comes out in our investments too,” he said. They invest through systematic investment plans (SIPs) and lump sums; there is now a term plan to take care of life insurance; and health insurance that covers all four family members.
The consultations are not limited to how much money to put and where. It goes further. “I even ask him about tax planning and real estate,” he said. For example, at one point, said Bhadresh, “I had heard and read about gold being a stable investment option. I had called Melvin to ask if we should sell the gold and buy paper gold instead,” recounted Bhadresh. The reply he got was that there was no need to invest further in gold.
Various such discussions and the resultant decisions have made Sapna and Bhadresh more confident about their finances and future plans. “Earlier, I used to be concerned about whether I was making the right investment decisions. I wanted to make the money work in the smartest way possible, using the best possible expert help. At the same time, I waited to build trust and confidence in the expertise of the expert,” said Bhadresh.
Sapna said she is not much involved in the financial decisions and her only requirement is that their needs are taken care of. “It is mostly about children’s education, and our retirement. We are not much concerned now. I am happy about that,” she said.
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MY PLAN
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Name: Bhadresh Rami
Age: 42
Profession: Drug discovery in a pharma company
Name: Sapna Rami
Age: 33
Profession: Homemaker
Financial planner: Melvin Joseph, founder, Finvin Financial Planners
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First Published:7 Aug 2017, 04:09 AM IST
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