Protect your loved ones from lifelong guilt – have the conversation

Protect your loved ones from lifelong guilt – have the conversation

The last couple of weeks has seen a couple of friends go through unimaginable trauma. Can you imagine helplessly watching your parent slip away bit by bit? One would think what a terrible thing, there can be nothing worse than going through this. But there is! What if the decision of continuing further aggressive medication and lifesaving treatment (albeit with highly degraded quality of life) or letting your loved one go with basic treatment rests with you? Suddenly the situation is many times worse!


Huge dilemma, right? It is natural to wonder what the sick person would have wanted in such a situation. Why then, is it so difficult to have a conversation about death and disease with our loved ones? Somehow our culture forbids us from talking about these unpleasant situations. Even if you broach the topic, you are likely to the shooed away saying “yeh kya apshakun bol rahe ho?”. It is almost as if you are inviting death and disease just by talking about it.


A small minority does think of what happens to their material wealth post death and manages to make a will. While this is a very important step, and everyone must do so, is it not our responsibility to ease the guilt and emotional trauma for our loved ones? All one needs to do is to have a conversation on what you would like them to do in case you are to be put on life support or given aggressive treatment which will reduce the quality of life.


When you are sick, they may choose not to follow your wishes. If they do, they will live guilt-free that this is something you would have wanted for yourself had you had your mental faculties intact to decide. As against not knowing and doubting if they should pursue all means possible to keep you alive and living with the guilt of ‘not trying enough’ if they choose to relieve you of your suffering.


While we are on this topic, it would be good to dwell upon a document called “living will”. A living will is a document that sets out a patient’s wishes regarding how they want to be treated if they are seriously ill. It allows a person the right to die with dignity.


In March 2018, the Supreme Court of India passed a landmark judgement, where it recognised that a terminally ill patient or a person in a persistent vegetative state has the right to die with dignity, and to do this the person will have to have executed a living will.


The difference between having a conversation with your loved ones on what you would like them to do if you are seriously ill and have no scope of recovery and any treatment that would prolong your life is likely to compromise heavily on the quality of life versus making a living will is stark. In the first case, all that the loved ones can do is decide not to pursue aggressive treatment and let time take its course. Whereas in the case of a living will, subject to a lot of conditions, including having a board of doctors granting permission, among others, it is possible to end one’s life immediately without any suffering.


The concept of a living will is new to India, and while being a step in the right direction, it remains to be seen how it practically pans out. It is for you to evaluate whether it makes sense or not to go for a living will. However, having the crucial conversation with your immediate family (spouse, children, siblings, parents) is non-negotiable. Let’s put aside our inhibitions to do just that, this week.


Image Credit: Gerd Altmann, Pixabay


Finwise is a personal finance solutions firm that helps both NRI and resident individuals and families plan for their financial goals, follow their passions and achieve financial independence.
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How women should plan for their parents’ financial and other needs

How women should plan for their parents’ financial and other needs

Somehow in our society, while it is an understood thing that a man needs to take care of his parents, it is not such a given for the woman. It is strange when you think of it, since equal share in property post demise of parents is accepted by all, while equal share in responsibilities not so easily so.


However, a woman has the same instinct as a man’s and would like to be there for her parents, financially or otherwise. So how can you plan for such debts, which in a way, can never be fully repaid?


Read our latest article, published on


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Women must develop the right money mindset for a fruitful post-retirement life

Women must develop the right money mindset for a fruitful post-retirement life

When we are still working, we make so many plans of things to do once we retire. And as we get onto the home stretch in the last few years, the excitement begins to build, of course, with a few butterflies in the stomach as well. So many places to see, so many people to meet, so many suppressed aspirations to fulfil, all of course, while juggling one’s hard-earned wealth and believing that there is enough, not only for ourselves but also to bequeath.


But retirement is not always as rosy as you imagined it to be. The transition to retired life is sudden, and there is a vacuum of time, that has to be fruitfully filled. That vacant space has to be occupied with activities that need to be created, not only to feel gainfully employed, but also to feel good about oneself. The actual retirement, therefore starts with a whole lot of unexpected dilemmas and mental adjustments.


What are those scenarios that one must adapt and adjust to?


Read our latest article, recently published on (link given below).


In retirement, the role of money is to allow one to fulfil our bucket list of desires, while ensuring that there is enough to take care of our balance life-times, including exigencies. Nothing more, nothing less. Hence, as a retiree, use money to bring you happiness and add meaning to your life, while taking care that it is safely working for you as well. 


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Dear Woman, write a Will to ensure your wealth doesn’t go to undeserving hands

Dear Woman, write a Will to ensure your wealth doesn’t go to undeserving hands

Having a will is a must for easy and fair distribution of your wealth as per your desires. After all, it would be a shame that a lifetime of effort towards wealth creation for your loved ones, to meet their aspirations and goals, gets derailed in case of an unfortunate death intestate.


Read more in the below link about how a will can help you protect your wealth, in our latest article, published in our monthly column on


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Mirror, Mirror, On the wall, Which is the biggest risk of them all?

Mirror, Mirror, On the wall, Which is the biggest risk of them all?

“If the highest aim of a captain were to preserve his ship, he would keep it in port forever” – Thomas Aquinas


With the market indices at all-time highs (the Sensex touched 40000 and the Nifty touched 12000 on 23rd May 2019, post the election results), it will be pertinent to congratulate those retail investors who have benefited from it. They have benefited because they have stayed invested through the bad year that 2018 was, and therefore benefited from this run up in 2019.


Such investors are in a minority today. Most investors either have never considered equity due to fear and lack of awareness or keep their investment to the minimum because they do not want to take the “risk”. By staying away from equities, they avoid a “risky” investment and invest their hard-earned money into other “safe” investments – bank fixed deposits, corporate bonds, gold, real estate.


But, is this really less risky? What investors fear in equity is the volatility that is associated with it. By investing in less-risky avenues, one is avoiding this volatility. When one looks at risk in this way, defined as “volatility”, then yes, equities are riskier.


But, as an investor, the actual risk that you should be worried about is not achieving your financial goals. After all, of what use is the avoidance of volatility risk in the short term, if one is unable to meet one’s financial requirements in the long term?


If you are investing a sum of money without a particular goal and time-frame in mind, then you are making 2 mistakes with your money.


  • One, you are not setting any expectation from your investment and therefore cannot review its performance over the right periodicity, and take appropriate course corrections.
  • Two, you will unnecessarily track the movement of your investment frequently and get impacted by the volatility, and since you don’t have a goal or a target in mind, you will move to take hasty short-term decisions with that investment, maybe at a loss.


To understand this better, let us look at two commonly occurring scenarios


  • A invested Rs 500000 in shares on the advice of his good friend at work, who traded frequently and hence was “knowledgeable”. His friend said that markets are doing very well and if he invests now, he can get a good return in a short time. Instead, 4 months after he invested, the market saw a steep correction and A saw his capital come down to Rs 400000. Not wanting to lose further, A sold the shares at a loss, in 6 months.



  • B bought a second house in an upcoming suburb and took a home loan of Rs 80 lakh for this purpose. He bought this house because the suburb was slated to be close to the new airport and as per everybody he talked to, the area was slated to explode in a few years. Unfortunately, the house took 3 more years than planned to get possession, and the location still hasn’t developed to that extent, and hence isn’t yielding a decent rental. B still has nearly another 10 years to repay of the loan, and the outstanding loan is more than Rs 60 lakhs.


Do these sound familiar? So, what went wrong? In both these cases, the investment was neither planned, nor reviewed, with an underlying purpose. And hence, while the vehicles (shares, house in suburbs) themselves may not have been poor investments, wrong actions were taken (sell shares early, hold on to the property too long).


The first step in investing is to identify what is the goal one is investing for, and what is the time horizon that one is investing for this financial goal.


Once one has identified the goal and the time horizon, then the logical next step is to identify the correct asset class (or mix of asset classes) that one should invest in, in order to achieve the financial goal in the most efficient manner.


This should, of course, be done while keeping in mind one’s risk appetite, but years of investing as well as observing investors, leads me to say that risk appetite is not something that is static – this evolves over time, through one’s experiences as well as knowledge.


Once one looks at the investing process in this fashion, volatility as a risk is something that gets taken accounted for while taking the investing decisions. And hence is not something that as an investor should worry you, since you have planned for it.


In order to achieve one’s financial goals, it is important that your investments not only grow at the right pace, to create adequate wealth to meet your goals, they should also be in the right asset classes so that you have the money when you need it.


By investing in so-called “less-risky” avenues, one is putting a sort of ceiling on the returns one can earn, by sacrificing them at the altar of short-term volatility. In addition, one is actually exposed to both liquidity as well as inflation risks.


By not taking “risks”, one ends up encountering the biggest risk of them all – not having enough money when one needs it, and in the right form so that one can access it easily without any trouble.


So, do yourself a favor and look in the mirror and ask yourself this – do you know what goals your investments are helping build wealth towards? And how many of your investments are actually helping you create wealth that is both, beating inflation and helping you meet your goals?


Finwise is a personal finance solutions firm that helps individuals and families plan for their financial goals, follow their passions and achieve financial independence.


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Do you know your “Finish Line”?

Do you know your “Finish Line”?

Over the last few weeks, Std X and Std XII results across various boards have been announced. As usual students all over have done very well, with many students scoring a full 100% as well, and 95-96% almost seeming like an underperformance!

At the risk of sounding a bit geriatric, it seems to me that while our times were reasonably high-scoring too (if am not wrong, my school topper in Std X got around 88-89%, and I was very happy to be in the same decile), in this generation, this scoring business has gone a bit too far. I would like to think that, beyond a certain point, how much you score doesn’t actually determine success in later life, and vice-versa. Also, this extreme focus on scoring in academics in the early years takes away from valuable life-skills and competencies that should be learnt or built, that, I can say, from experience, are likely to hold our children in greater stead in the later years.

But as is said, life is a race, and you have to run it, like it or not. It’s just that no one tells you what kind of race it is! And hence, despite our best efforts both during education and work, we aren’t adequately prepared for it!

 Life in school and junior college seems like a 100-meters sprint, with everyone (well, it seems like nearly everyone nowadays!) scoring in the top few percentages (just like in a 100 mts race, where every finisher is within a few milli-seconds of each other).


And hence when we reach “real life”, ie. higher and post-education years, we are still prepared for a sprint and we get a rude shock when it starts resembling something completely different!

 My take on this is that Life is actually a special kind of long-distance race because of the following two reasons.

 One, like a steeple-chase, there are some reasonably-heighted thresholds that one needs to get past. Beyond a point, how high you jump doesn’t matter, as long as you cross the thresholds.

 These thresholds are personal performance as well as personal skills related, ie. making sure that you do reasonably well in your education and initial corporate life, including learning the necessary life-skills. Eg. good performance in your major exams, landing a good job, getting the right breaks at work, building the right professional skill-sets, etc.

 Like in a race, success is about making sure that one doesn’t trip on these thresholds. Else, the race in future can have various handicaps.

 Two, like in a long-distance race, while all are running, each is running at a different pace, and after a time not running together at all. The race also has a bit of trail thrown in, where one can get lost for a while, in search of directions! Importantly, after a point, each one is running his or her own race, trying to do as best as possible.

Like all races, this one too is a success only if you finish it. The unique thing about this race is that one can determine where is the “finish line” and plan for it. In a way, everyone has his or her own finish line, which they have the freedom of deciding, and which then, they have to reach.

 Reaching your finish line successfully means that you have gained financial independence and have the freedom to retire, to do what you love with your time, to follow your passions.

 The key to winning your own race is to identify your finish line well in time, having a plan to run this race well, including for any unplanned detours on the trail, and reaching your finish line in good shape, feeling happy that you could actually run a couple of miles more!

 So, do you know your finish line? What and where is it? If you do, then do you have a plan to reach it in good shape? And if you still have a good bit of the race to go, are you prepared for the thresholds that will come your way?

 Photo by Jenny Hill on

Finwise is a personal finance solutions firm that helps individuals and families plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at or +91 9870702277/9820818007.

4 reasons why women must take charge of their financial planning

4 reasons why women must take charge of their financial planning

As a woman, you may be in charge of your present. But are you in control of your future?

Taking control of your financial future is important. Take out the necessary time for it.

It is important not to confuse your current financial independence with financial freedom. By being financially independent you are able to take care of your personal expenses at present. When you are financially free you are able to maintain your desired lifestyle throughout your life-time, including your retirement. This is not going to happen automatically just because you earn an income. It requires thought and planning and is more challenging for women than it is for men. Pl read my latest article published on

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Your EPF can be your Secret Santa, provided you don’t touch it until the Christmas of your life!

Your EPF can be your Secret Santa, provided you don’t touch it until the Christmas of your life!

For most of us, our mid-40s seem to be a very hectic life-stage. We frequently imagine our retirement being made up of long holidays with no emails to check and phones to answer, and we hope to start a peaceful retired life someday soon. Unfortunately, these day-dreams end as soon as they start, rudely interrupted by kids, work or something else “urgent”.

Wanting to retire in peace with no liabilities and financial stress is something that everyone aspires for, and rightfully so. After a life-time of hard work, this is something we are entitled to, aren’t we? That said, this peace of mind is not something that comes automatically, and needs to be worked towards, with discipline.

One investment which is the biggest contributor to a salaried person’s peaceful retirement is his or her EPF (Employees Provident Fund). It is therefore extremely important to give it a little attention and time.

When we make a financial plan, a few clients who don’t attach much importance to retirals are pleasantly surprised when they see the amount accumulated.  If EPF is left untouched and promptly transferred every time one shifts jobs, it can truly bring a lot of relief when most needed.

Sadly, we see many clients in their mid-forties who have a low accrual in EPF.  Ironically, the reason is they are knowledgeable and relatively personal finance savvy! They recognise that there is much to savings beyond Sec 80C and with the kind of time-frame available for retirement, they would be better off investing the amount elsewhere and making far higher returns than that on offer with EPF.

While all of this is true, what most of them fail to recognise is once you withdraw the amount it is needs to be earmarked for retirement with discipline.  When you have investments, which are visible and are tracked on a regular basis, you will be surprised at the numerous expenses which suddenly crop up and seem “urgent and unavoidable”. The result is – the EPF amount that is withdrawn and carefully invested while changing jobs, is dipped into to meet this “now important” short-term expense, leaving a big void in your retirement pot.

This might sound unreal, but I am yet to meet a client who has withdrawn the EPF and re-invested it with retirement in mind, but has let it remain there till retirement. Do give this aspect a serious thought before you choose to withdraw it for “better investment opportunities”.

We also come across people who have shifted multiple jobs but have not shifted their EPF from previous employer to the current one. The thought process is, it is earning interest, and it is safe, there is no hurry to transfer, lets do it when time permits. Unfortunately, it becomes another item on the to-do-later list and ends up remaining there.

The process of transferring EPF is now online and simple and consumes very little time. In the minds of most people though, this is a complicated procedure requiring multiple visits, paper work and constant follow up. Once you realise this, it may motivate you to action this immediately.

The more pressing reason for you to do so is that if you stop making fresh contributions to your EPF the interest paid on the amount accumulated is taxable. This is a big downer and should be incentive enough to transfer it on time.

Remember you could be working for the same employer but may have had multiple internal transfers within group companies, these need to be treated as job changes and you need to ensure that the EPF has been transferred. I have seen people quit after 15 years with one group and then realise that EPF accumulation does not go back to their date of joining the group, due to multiple intra-group transfers.  Getting these transfers done when you are not part of the system and do not have access to the right people can be frustrating and time consuming.

It is very easy to download an EPF passbook online, I have given the link here on how to – I strongly suggest that you do this at least once a year and ensure that all transfers are done. You will reap rich dividends for the time and effort put in tracking and ensuring your retirals are not idling away. If any of you have had interesting experiences with EPF do share them for the benefit of everyone in the comments below.

Finwise is a personal finance solutions firm that helps individuals and families plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at or +91 9870702277/9820818007.

Are you being Penny wise and Pound foolish?

Are you being Penny wise and Pound foolish?

I have been conducting financial wellbeing camps at corporates for a few years now, and a couple of questions invariably crop up at the end of the session.   One, can you give us a few good MFs to invest in?  Two, what about investing in direct plans, they are cheaper right?  Three my advisor doesn’t call me frequently to review my funds, shouldn’t he be?

Three questions which sound very different from each other, but are connected to the need of the customer to have access to expert advice so that they can follow a DIY approach to investing.  This is natural and a good thing even, when the person concerned has adequate time and knowledge to use this information for his benefit.  This is where many of them overestimate their ability and have perfect reasoning too. Let’s dwell deeper into each of these questions.

Can you give us names of a few good MFs to start investments in?

This is a very difficult question to answer, without having any other details.  Typically, before recommending an investment to someone, we need to know what is the purpose of investment. This gives us advisors two important data points, which are

  1. The importance of the goal
    • can you postpone it without grave consequence? Example. foreign trip. The same may not be true for child education.
  2. The time available for investments
    • This is crucial to understand as well, to enable making the decision of whether to invest in equity or debt

What about investing in direct plans?

This is a good way to invest, and yes, it is cheaper to go for direct plans.  This comes with a condition though, only and only if you have the knowledge and time to devote to this. Many HNIs and corporates use direct plans, but they have no problem paying a professional for advice and recognise their limitations in being effective without advice.

 Unfortunately, this is not true for most retail clients, where paying a fee for advice is not an easy decision.  As they say there are ‘no free lunches’, if you read about a particular investment on media it may be relevant today, if you invest and forget to check its relevance on a periodic basis, you have no one but yourself to blame. In such a situation, the money saved by going direct may not be worth it when you could have had a financial advisor to guide you and put your interests first and review your investments on a periodic basis for such risks.


My advisor doesn’t call me?

 I meet someone who said “my advisor never calls me to review my funds or with suggestions”.  In the course of the conversation, I realised the client had invested funds for which the compensation to the distributor was a few hundred rupees (this info is readily available in the consolidated statement received by investors every month from NSDL/CDSL).  His expectation of having a review and constant interactions were therefore not in line with what was feasible.

Note though that even if he had invested substantial amounts, constant conversation and change is not required. Investing (once done post adequate due diligence) is very boring and as long as you or your advisor is monitoring it periodically, there is no need for constant action. Hence, it is better to get clarity on the nature and frequency of interactions when you sign up for advice.

The value added by good advice goes much beyond helping you choose a scheme to give you returns in line with your needs. It is more holistic in nature and helps you solve your financial puzzle.  You will be guided through turbulent times, because remember, investing is going to be volatile. Your advisor will be able to temper your expectations so that market down turns are not a shock it can otherwise be. Another important aspect where a good advisor adds value is assess your risk appetite and tailor your investment plan accordingly.

How do I find such advisors you ask?  Interact with them to find out how the advisor plans her own finances, and ask them the above questions. If they answer with a string of names for the first question, they are not the type of advisor you are looking for. Understand how often you would be interacting, and how they would be getting compensated. Also, check which category you would figure in their current list of clients, these questions should help you zero in the right person for you.

Finwise is a personal finance solutions firm that helps individuals and families plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at or +91 9870702277/9820818007.

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Don’t Underestimate the Long-Term, Understand it

Don’t Underestimate the Long-Term, Understand it

While most people can be financially free, many don’t reach there. My earlier article spoke about 2 reasons (that I have observed, there would be more) – Underestimating the long-term and lack of direction. Today, lets understand how people underestimate the long term (and possibly why).

“Humans are terrible in predicting the future. We really overestimate what we can do in the short term and underestimate what we can do in the long term… If we can glimpse even a couple of years into the future, even that’s difficult to do” – Bill Maris

Underestimating the long-term is key to understand, since it is a weakness in the way humans think. We are used to thinking linearly whereas events in life have exponential effects – both on the upside as well as down. While the above quote originally alluded to technology driven evolution, it equally applies to the effect that money decisions can have on one’s future.

The upside impact of time is fairly straight-forward and I will not elaborate much on it as most of you would know it – the effect of compounding over time on money. Suffice it to say that this is like a lottery that you have a near-guaranteed chance at winning, the only condition being to start early. A common example that many mutual funds show to promote starting SIPs early goes something like this.

  • a SIP of Rs 10000/month from age 25 to 35 (10 years) creates a corpus of Rs 4.60* cr  at age 60 (ie. Start early with a sum at age 25, invest for just 10 years)
  • a SIP of Rs 25000/month from age 35 to 60 (25 years) creates a corpus of Rs 4.74* cr at age 60 (ie. Start just 10 years later, but with 2.5x the sum, invest for 25 years)

* (12% pa rate of return assumed in both examples, monthly compounding)

On the other hand, the downside impact of time is not something that is understood as freely. Here, there are 2 impacts that one needs to watch out for, namely Inflation and asset mix.

As we already know, Inflation reduces the purchasing power of your money, and therefore you need more every year to maintain the same lifestyle. Importantly, lifestyle inflation (which is what impacts us) is also a few percentage points higher than the headline inflation that is reported.

What this means is we do not readily understand the sums of money that we need for events/expenses that are beyond a few years ahead. Let me share a recent customer conversation. The customer is nearing 50, and has 2 goals, one short term (daughter’s marriage 3 years away) and the other a bit more into the future (retirement at 60).

His initial estimate for the cost of the marriage was fairly accurate. He estimated a requirement of Rs 70 lakhs 3 years from now, considering a current cost of Rs 50 lakhs. At an estimated lifestyle inflation rate of 8%, the required amount is approx. Rs 63 lakhs, hence not very off the mark.

But when it came to retirement, his estimates were way off. Basis his current monthly expenses (only him and his wife) of Rs 2 lakhs per month, he estimated that by age 60, he might need about Rs 3 lakhs. While intuitively this seems ok (a 50% increase!), when one looks at the effect of inflation on it, it is very inadequate. Assuming a lifestyle inflation of 8% per year, the sum required 10 years ahead per month goes up to Rs 4.32 lakh!

Remember this is nearly 44% higher than his estimate, month after month, for an entire retired life, of maybe 25-30 years. An underestimation like this proves very costly for retired people, needing them to make drastic changes to their lifestyle, at a difficult age, to sustain themselves.

A connected but important effect of underestimating the long-term is having an adequate corpus, but with the wrong asset mix. A real-life example occurred recently with very close family friends who came to us for advice.

While the retired couple were reasonably secure financially, the bulk of their assets were in real-estate, gold and fixed deposits. Their cash-flows were in control currently, but in a couple of years from now, they would have had to start breaking their deposits for monthly expenses, and were projected to exhaust them in about 8 years, leaving them with assets but no cash.

While these assets are safe, they are both illiquid and not necessarily inflation-protected. While real estate may protect inflation to some extent, important to remember than it has the disadvantage of not only being very illiquid, but also stops appreciating at market rates once the house is more than 20-30 years old.

The effect of time on money can be deleterious if not estimated properly in time and necessary corrective actions taken. Hence, underestimate this risk at your own peril.

Finwise is a personal finance solutions firm that helps individuals and families plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at or +91 9870702277/9820818007.

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