Name: Devendra Katiyar
Profession: senior safety management executive with an energy company
Name: Laxmi Sachan
Financial planner: Amit Kukreja, Sebi-registered financial adviser and founder, WealthBeing Advisors
Gurgaon-based Laxmi Sachan and Devendra Katiyar had more questions than answers. They had some notion of the overall structure for their long-term finances in mind, but needed concrete parts to come together to form a solid structure. “I wanted advice. You know that you have the future in front of you, but how do you prepare for it?" said Devendra.
They found the answer with the help professional advice.
Devendra had many questions: “I wanted to know my net worth. Should I be doing something else (apart from what we were doing with our money)? When could we be out of the rat race?"
The couple sought some answers on the internet but they needed a second opinion, which they got from Amit Kukreja, who validated some of their decisions and helped change some of the others.
“He understood our need for simplification," said Devendra, adding that his profession in safety management has affected his ideas about money as well.
“I was specifically looking for fee-based advisory because then the advice is unbiased. Banks have a confused set of products," said Devendra.
Going through the process of financial planning helped Laxmi and Devendra set some goals too, which included: their children’s education (they have two sons); a sooner-than-later retirement; and the sufficiency to achieve the goals.
“There was a lag between knowledge and its use," said Devendra.
Plan of action
“Our accounts were here and there," said Laxmi. As the couple wanted simplification in money management, they were advised to rationalise their bank accounts, and then classify them. “He (Kukreja) told us to have five accounts and that’s it," said Devendra.
“He asked us to have separate accounts for savings, investments and expenses. If there is more in one, some (money) can be transferred to another account. This is easier to track," Laxmi added.
Apart from that, the couple also had to get their documents in order. “The important ones were separated from the useless ones. Those for property, bank accounts, nominees and lease papers were organized," said Laxmi.
In terms of investments, the overall exposure to equity mutual funds was reduced, based on “our risk profile". They were also advised to go for direct plans of some mutual funds. The other asset that was pared down was real estate. “How does one get out (of real estate)? It takes time. But I found that outlook reasonable because the ticket size is so large," said Devendra.
Through the process of planning, behavioural control was reiterated. Apart from simplification, the couple was also looking for a structure to achieve their goals. “I want to be in a position where my expenses are taken care of. If you can get that from investments, then you are at a good position," said Devendra, who as of now plans to ‘retire’ at about 50 years of age.
“We got a lot of peace of mind that household expenses would be taken care of. There was security," said Laxmi.
The process also more strongly oriented the couple to the goals of their children’s education and Devendra’s retirement. “We got a lot of clarity on how much to spend where, how much to increase our savings, and how to invest," she said, adding that she is now more comfortable with the family’s finances. “Earlier, I did not have much idea about mutual funds and other investments." That has changed now.
“I wanted my wife also to be aware. One must be prepared for consequences. As much as can be planned, should be planned," said Devendra.