What eight years of marriage and a kid couldn’t drive Amit Kukreja, 35, to do, the downturn did. Though having a financial plan was always on his mind, he never thought about it seriously until the 2008 market crash. “I first thought of getting a financial plan for myself when we had our first child, but it didn’t happen because of my busy schedule and career demands. I never took it seriously," he says.
Like many others, Kukreja saw his savings crumbling and didn’t know how to steer his finances back on track. Plans to have a second baby just added to the urgency to secure his future. “I realized I needed sound advice and a plan that would protect me and my family," says Kukreja.
He also realized that just investing was not enough and that to build savings for his family, he needed a good plan.
That’s when he approached Mumbai-based financial planner Suresh Sadagopan.
INSUFFICIENT LIQUIDITY. His biggest problem was managing cash flow because of the inconsistency in his spending and saving pattern. “This led to insufficient liquidity to deal with contingencies and short-term goals," says Kukreja.
INADEQUATE COVER. Another issue with Kukreja’s finances was the fact that he had inadequate insurance cover. “Without that, it would have been difficult to fulfil the family’s commitment towards future goals," he says.
TOO MUCH REAL ESTATE. Sadagopan told Kukreja that his portfolio was skewed towards real estate.
GOALS. The first step to getting his finances organized was having goals. “The planner helped me turn my dreams into goals," Kukreja says. Some of these included buying a bigger house for his family, regular vacation in the US and Europe and kids’ education and wedding expenses.
“We have already started saving for our kids and second house," he says. But they have put on hold Hridi’s dream to have a retail franchisee for now.
INSURANCE. One of the first few suggestions was getting adequate life cover. “The planner asked me to get rid of a few unit-linked insurance policies (Ulips) that were not of much value." He also took covers to protect his assets like his first house.
LIQUIDITY. Building up liquidity was a must for Kukreja. The planner insisted that Kukreja should open a contingency savings account, which should have an amount equivalent to his six months’ salary at all times. He also made him liquidate some of his real estate and Ulips.
DIVERSIFICATION. While earlier the focus was mainly on real estate, now Kukreja makes sure his savings are channelized into different asset classes such as liquid, bond and equity funds, besides short-term deposits.
“My dreams would have remained just dreams if I did not have an action plan to achieve them," says Kukreja. He believes that he’s laid the right foundation for his family and himself.