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Like most people, Mumbai residents Chinmoy and Namrata Tikader depended on their friends’ suggestions on investing for the longest time. The suggestions were as diverse as their friends. As a result, their investment portfolio became over-crowded with products, most of which were not aligned with their needs and financial goals.

Chinmoy did understand the importance of saving and investing right from the beginning, but he didn’t choose suitable products. He kept investing in fixed deposits as well as small savings schemes like Kisan Vikas Patra. He also invested in real estate early in his career and bought some endowment policies. “After 10-12 years, I got confused by the number of ideas and suggestions that I had received and the number of different investments we had," he said.

He was initially wary of going to financial consultants or distributors, who may not charge a fee but get commissions from companies. “The reason for my apprehensions was that I had consulted some financial consultants in the past. But those consultants had a basket of 5-10 products and they kept on advising the same to everyone. They did this irrespective of the financial goal and the time to achieve it," he said.

But after working and saving for 13 years, Chinmoy realised he should invest more in equity to get the desired returns. However, he was not sure whether he should buy direct stocks or mutual funds. Within funds, he didn’t know how to choose the right scheme. That’s when he decided to approach a financial planner. “There were too many permutations and combinations. On a friend’s suggestion, I met Melvin Joseph," he said. Joseph, a Sebi-registered investment adviser and founder of Finvin Financial Planners, not only helped him figure out which investment to pick up for his equity portfolio, but also charted out a comprehensive plan for the family.

When the family met Joseph, only 10% of their assets were invested in equity, which was inadequate given the couple’s age and not in line with their goals. “When he approached me, he was invested in two properties and was paying two home loan EMIs. He had some regular mutual fund plans, and two endowment policies from insurance companies, the premiums for which were high. He had a term insurance but inadequate cover," Joseph said.

Joseph discontinued the investment-linked insurance plans and suggested a few funds based on the family’s goals.

“Melvin understood my goals and customized my investments as per that. The market has been very volatile in the past two years. Even in such a situation, the performance of the funds suggested by him has not been bad," Chinmoy said.

From 10% in equity, the family has moved to investing 70% of their portfolio in the asset class; the rest goes in debt. Direct mutual fund plans cater to the equity portion, while the debt portion has provident fund and other debt instruments. Chinmoy has bought a term insurance with a high cover, but the family continues with health insurance provided by Chinmoy’s employers.

The Tikader family is working towards two long-term major goals—retirement and their daughter Jahnavi’s (13) higher education. The family is also working towards having a bigger house than they already do. Periodic vacations are also part of the financial plan now.

After years of investments in inappropriate instruments and assets vis-à-vis the family’s goals, Chinmoy now regrets the “notional loss" that he has incurred. “I feel that at the early stage of my career, I should have invested in equity. Had I taken up financial planning at that point, I would have been in a much better situation," he said.

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Mistakes I won't repeat

■ Won’t have scattered investments

■ Won’t stay away from equity asset class

■ Won’t buy insurance as an investment product

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