Pune-based Partha Choudhury, 27, wants to focus on his life and interests and not be bogged down by worrying about money. Also, he thinks self-help in financial matters is not the best option. “If I choose an investment product myself, I will probably get swayed by returns and may end up buying a product that gave the highest returns. On the other hand, a financial planner helps you make a rational decision. He will see what you probably can’t see," said Partha. To further ensure rationality, he wanted to avail the services of a fee-only planner so that commissions didn’t have a role in product selection. But he reached these conclusions only after a few wrong turns. 

“I had heard about financial advisers, but I didn’t know there were professionals called ‘financial planners’. There are so many financial experts...it was quite difficult to identify who the right professional was for my needs. In fact, I had called someone in Mumbai but she explained that she was an investment adviser and maybe what I wanted was a financial planner," said Partha. 

The next step was to look for a reliable planner, and Partha found an appropriate adviser in Chandan Singh Padiyar, who is also based in Pune.  

One of the early steps was to gather information on expenses, and Partha was in for a jolt. While he would make a note of his bigger expenses, the smaller ones were not taken into account. “I was surprised by how much even the small expenses add up to. If I spent Rs5,000, I would note it down. But not if I spent Rs500. However, Rs500 spent 10 times amounts to a lot," he said. Partha realised that all expenses, big or small, count. The exercise also revealed where some money was mis-spent. For instance, Partha saw that money spent on parties or eating out could be reduced and used better: “Imagine what would happen if I had put the same money in an SIP?" 

Discussions on financial goals pushed Partha to think about what he wanted from his money. “This kind of analysis is like holding up a mirror to yourself. Where do you want to be in 5 years? Are your parents going to need your help?" 

The next step was to get Partha adequately insured. “I was told that before getting into investments, it was important to insure my health and life," he said. This led to Partha getting a term plan and an enhanced health insurance. The overall safety net was strengthened with an accident cover. “I realised that if there were an accident after which I am not able to work, a term plan will not work," he said.  

The next step was to invest for goals. While Partha was comfortable with the risk of equity investments, he was told that these would not be suitable for short-term goals that were, say, 2 years away. So, he has instead invested in liquid funds for these goals.  

One of Partha’s long-term goals is to ‘retire’ at age 45. “I want to be financially independent by then." He wanted a financial plan for the time between 45 and 80 years. A number was arrived at, which indicated how much he would need if he were to retire early. “Around 30% of what I earn had to be invested in a certain way. And whatever I save now, should increase 10% every year," said Partha. 

He is flexible with some of his short-term goals. “For example, buying a car. It is useful but one can survive without a car." This has been postponed. Another short-term plan was going for higher studies in 2-3 years, for which money has been allocated and investments are being made. 

This kind of analysis and decision making has helped Partha be more conscious of how he spends. “When I know that my insurance and future goals are taken care of, I can spend without worrying about whether I should spend it or not," he said. 

The clarity that has come about thanks to the financial plan, Partha said, has freed him from worrying about money all the time.

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MY PLAN

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Name: Partha Choudhury

Age: 27 years

Profession: Marketer with a tech company

Financial planner: Chandan Singh Padiyar, Sebi Registered Investment Adviser

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