Financial Planning | Finwise

There are some things money can’t buy, for everything else there can be a financial plan!

Prathiba Girish Financial Planning, Personal Finance November 5, 2018November 5, 2018Diwali, financial planning, money and diwali, prosperity 3 Comments

It’s the time of the year when there is so much hope, joy and festivity in the air. I have beautiful memories of Diwali. This was a festival we looked forward to as children and we would count the days to Diwali and await it with great excitement. I keep asking myself what is it about Diwali, that makes it so special.

Diwali caters to all our senses. It suggests bright colours and lights, the lovely fragrance of flowers, the sound of music and crackers, and of course the aroma and taste of great food. We used to stay in an independent house. The road which lead to our house was a dead end and I remember practising rangoli so that I did justice to my half of the road. My neighbour was really artistic and would effortlessly make neat, large rangolis in front of ours. The camaraderie we shared planning these rangolis brings a smile even today after twenty years.

We had marigold torans on the doors and the rose petals soaked in rose water in a mud “urli” lent a beautiful touch. And we would deck our hair with fragrant jasmine, without which no festival is complete down south. Diyas were simple and made of mud, not painted and nothing fancy, but the string of diyas on the compound wall made the whole house come alive.

The food is altogether another story, preparations would start days earlier with one sweet or savoury item being made in decent quantities every day. I remember the days when Amma would scream her lungs out and expect us to come and help. Both my brothers and me would help her for all of 15 minutes and the moment the first batch was ready we would scoot with our spoils. The coconut burfi, thenkuzhal, murukku, ribbon pakoda and karanji were made only on Diwali and we would attack the food with complete enthusiasm.

The crackers would be purchased at least a fortnight in advance and split equally amongst us under our watchful eyes, we would not budge during this exercise lest the sibling gets a better deal. Once this was done our trading would start can you trade your rockets from some flowerpots? The list would go on. New dress was non-negotiable. The rustle of silk and women in their beautiful kanjivarams is so intrinsic to Diwali.

Forward to today, I struggle to create similar memories for my children. They do enthusiastically help in making the rangoli, and help me string lights on the windows. But they are kind of taken aback by my excitement to make all the traditional sweets at home. Dutifully they do their bit and help me in preparing the same. My son asks “why are you making so much? Who is going to eat them?’’ They are not really interested in the traditional sweets or savouries unless I think of a way to incorporate some cheese, chocolate or some such thing into it. My defence that Diwali is not the same with store-brought sweets falls on deaf ears. The kandils and flowers are in place and so are the rangolis and diyas. What is needed to bring a smile to our faces and warm our hearts is the getting together of family and friends in the old-fashioned way.

This is a time when realization dawns that happiness and memories are formed from small inconsequential things and with meeting and greeting loved ones. It is truly like the ad “there are somethings money can’t buy”. So true! Think back and you will agree that your happiest memories are not about your material acquisitions but about experiences that have brightened someone else’s day along with yours. May the spirit of Diwali live in us all year through and help us value the simple things which bring so much joy.

We at Finwise wish you and your family a very happy, prosperous and safe Diwali!. Finwise is a personal finance solutions firm that helps people plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at prathiba.girish@finwise.in or +91 9870702277.

Title inspiration : MasterCard. The intent of this blog is to share a similar thought as what MasterCard intended – that life’s simple pleasures cannot be bought with money.

You can be young and without money, but can you be old and without it?

Prathiba Girish Financial Planning, Retirement October 24, 2018October 24, 2018 1 Comment

While young people who are just venturing off and finding their feet may find themselves without money, this brings to mind an image of positivity. It brings to mind carefree days, huge potential, unlimited possibilities and is indeed a happy picture.

When you flip the coin and look at a senior citizen who has no money, what is the image your mind conjures up? Is it of loss of dignity, dependence, despondence and tension caused by uncertainty about the future?

We all know the importance of being self-dependent in the twilight years. Yet somehow you find many a senior citizen cash strapped and living a very cautious, uncertain life, and depriving themselves of small luxuries which are so rightfully theirs, earnt over a life time of prioritizing everyone’s needs above theirs and being thrifty.

When I look around I find so many senior citizens who are asset rich but are having a tough time making ends meet. These are seniors who have real estate worth lakhs, but think very hard before booking a ticket to the music program that they have been really looking forward to.

In most cases while savings of their lifetime lies locked up in the form of a house, the children contribute towards their day to day needs. This automatically gives the children the upper hand and the parents think and rethink basic wants and needs since they have to dip into the pockets of their children.

On rare occasions where I have approached these senior citizens to monetize their house, seek professional help to invest the proceeds and live a life of a much better standard in a rented house, I am met with shock and disbelief. In all these cases the children are well settled and the estate is not going to make much of difference when its time. However the same has a potential of giving a wonderful, carefree life filled with much cherished experiences to the seniors. ‘

The common objections to this are

This is our hard-earned asset. How can we sell it?
At this age, you want us to shift houses every year or so? We are too old to manage house hunting, shifting etc.
What will we leave behind to our children when we are gone?

Each of us have our own belief systems. I feel shifting to a better house even if you are doing it repeatedly is worthwhile, especially given the fact that your second innings is with financial independence.

Of course, you are not expected to do the actual hunting and shifting, you will be surprised at the level of service available when you can afford the cost. All it takes is a proper real estate agent and a good mover and packer to get you settled.

Why worry about leaving behind something for your children? The greater worry should be of being at their mercy and expecting support in your life time. As for estate, I am sure your children will not have a problem when you leave behind wise financial instruments as compared to a tax-unfriendly, illiquid difficult-to-split piece of real estate.

I am sure there would be other views and would love to hear them. Do drop a comment on what path you would like your parents to choose if they are caught in a similar situation.

Finwise has significant experience working with retired customers and helping them live their second innings with financial security. We are a personal finance solutions firm that helps people plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at prathiba.girish@finwise.in or +91 9870702277.

And you thought women can’t handle finances?

Brindha Rao Financial Planning, Finwise Woman, Personal Finance October 19, 2018October 22, 2018 2 Comments

Looking out at the azure sky with your morning cup of coffee, watering the ferns, listening to the wind chimes softly sing their song and smiling to yourself.

This is the dream my retired life is made of. A white picket fence is welcome too.

When you about to think how clichéd that sounds, let me tell you it is possible. The prime factors for the said situation being good health – physical, emotional and financial.

This image is for representative purposes only

How did I come up with this, you may ask. Meet Mrs. M, in her 80s, who I would like to call a Finwise Woman. I had the opportunity to meet with her some months back and interview her for this piece. As I walked into her spacious and well decorated apartment, I couldn’t help wondering if I had entered the wrong house. A confident mother, who brought up her kids all alone, who worked hard through her prime years, who is today proud that her children are well settled, who has excellent knowledge in the finance and investments world, who is seasoned in the trading market, Mrs. M is an inspiration to every one of us.

When life upset her with the sudden demise of her husband in her late 40’s, she picked up the pieces and decided to stare right back at the challenges ahead. She started out as a financial advisor for mutual funds, insurance, ULIP etc. as taking up a full-time job meant she would be away from her young kids, moved to be near her family and started re-building her life. From ground zero.

Often having heard and observed her family members who were stock market savvy, she began to invest small amounts in stocks. She managed her finances well and gave the best possible education to her children, and saved wisely.

Today she is financially independent, manages her home and investment portfolio, which is so good it can give any financial planner a run for their money! As I chatted with her over tea, I realised it was not just her courage that stood by her all through, it was also her willingness to learn under any circumstance , the confidence to rise above the challenges and her wisdom and forethought in planning.

This interview was so much better than any other luncheon meetings I have been to. I returned home with a head full of inspiration, a heart full of admiration and a story to write about.

Here’s to the Finwise woman in her. And in you.

This article is written by Brindha Rao, our guest writer. I would also like to thank an unnamed family friend, whose image has been used, with permission. She is an equally good candidate for being a Finwise Woman, being a savvy and financially independent woman in her own right.

Finwise is a personal finance solutions firm that helps people plan for their financial goals, follow their passions and achieve financial independence. If you wish to consult us, please reach me at prathiba.girish@finwise.in or 9870702277.

Six urgent personal finance actions you must take as a woman!

Prathiba Girish Financial Planning, Personal Finance February 5, 2015October 15, 2018 2 Comments

1) Invest don’t save
While most people use both words interchangeably there is a world of difference between the two. We women are considered to be very good savers. That is, we do put away a part of our income for a rainy day very effectively. When it comes to Investing which is ensuring that the money put away is fetching us appropriate returns that are commensurate with risk taken we fall woefully short. One of the main reasons for the same is extreme risk averseness and lack of interest in finances, which we don’t consider our domain. There are a lot of resources available for you to explore different options before you invest do take complete advantage of the same
2) Indulge your love for gold.
The very thought of gold brings a sparkle to most of us. Indulge in gold it can be a very good hedge against currency. Ensure gold forms 5 to 10 % of your portfolio. Investing in the right form is very important. The making charges a, wastage etc. levied on jewelry does not make it a desirable choice. Consider gold coins and better still gold ETF. Invest in gold on an ongoing basis and avoid buying them during Akshaya Tritya and Dhanteras and such other auspicious occasions where the gold price is at its highest.
3) Befriend Equities
Investing in equities is no rocket science. When you are investing for the long terms there are very few asset classes which can match the returns given by equity. Learning the basics of investing in equities is an absolute must. If you find it too cumbersome to invest directly choose the mutual fund route. If you need to take advice on which funds to invest in, take advice of a professional who is not motivated by the commission he/she receives from the mutual fund company but has your best interest at heart. If this means you need to shell out a fee for the advice don’t scrounge, it will stand you in good stead
4) Take an health insurance
This is something you absolutely must do, with spiraling costs of hospitalization being left with no health insurance is not an option any of us can afford. I would go a step further and say take a personal insurance even if you and your family are covered by your/spouses employers. This will cover you when you/spouse are in between jobs. Further when you decide to take insurance at the time of your retirement you may not be insurable due to pre-existing illnesses and will be deprived of the facility when you need it the most. Look at a pure term life insurance if you contribute substantially towards the expenses and definitely opt for a critical illness cover.
5) Ensure you have a will in place
No matter how young you are it is critical to have a will. Accidents and unforeseen sickness is not something which you read about in papers and happens to unknown people any more. You would be surprised and shocked to know the laws applicable to women who die intestate. Making a will gives you peace of mind and costs you very little (anywhere between 7500 and 15000 depending on the complexity). You live all your life catering to every whim and fancy of your child would you like to leave them in a lurch in case of an unfortunate unseen event such as loss of both parents? Make sure you give a serious thought to who should be their guardians in such a scenario. Ensure your nominations and bequeaths are in line with each other. Get your spouse to make a will too.
6) Don’t put all your money into your business (this point is specific to self employed women)
List your goals and ensure you have a plan to achieve them. When you invest all your surplus into your business, which by the way has a never ending thirst for funds you may create a good company and net worth but you may not have the liquidity which you need. Once you have listed your goals start setting aside some money for your goals and don’t dip into it unless it’s a matter of life and death.
If you can juggle a family and business/job all by yourself this is fairly simple and straight forward. Wear the personal finance hat, believe me it is very liberating! Go for it now!

Why hire a financial planner?

Prathiba Girish Financial Planning September 26, 2014October 15, 2018 0 Comment

As clichéd as it may sound, Failing to Plan is Planning to Fail. While we take great pains to plan for small events like vacations round the corner or a birthday party for our child, we do not have a plan for our finances. Therefore, does that mean all of us who do not plan, live life king-size with no worries for tomorrow? No! Of course not, we Indians have an extremely healthy savings rate, currently pegged at 34% of GDP as against 17% of GDP for the US.

Now you would wonder, if we Indians do save such a huge chunk of our income, where is the problem? Why bother with financial planning? Before we answer that, let us look at exactly how we go about investing our money.

How do we go about investing our savings?

• Luckily for us, culturally many of us have been brought up with the belief that one must invest in Gold and Real Estate whenever one has surplus. Contrary to what media and many finance experts have you believe, these asset classes have generated fabulous returns over the last 7 to 10 years. So, pat yourself on your back if you had invested in these asset classes 7 to 10 years back, you have done well.
• We invest in mixed needs products where the performance is just about average and end up not taking care of either of the needs completely or optimally. Examples which have been debated at length would be money-back and endowment insurances. These give you the emotional satisfaction of having catered to both insurance and investment needs.
• A lot of our decisions to invest in a particular product or asset class are driven by the fact that people in our social circle have invested in these. They are almost always ad-hoc and do not follow a particular plan and definitely are not done with the end objective in mind.

Points to ponder

• Gold and Real Estate – Do you understand the risks associated with these asset classes? Wouldn’t it be risky to put all your eggs into these baskets? Will they give you the same kind of returns in the future?
• As you embark on the second half of your corpus accumulation phase, how aligned are your investment decisions to your end goals? While you have got your big decisions right, what about those 20% of your financial decisions which will finally decide if you have an average plan or a good one?
• While you have got your investment decisions right till now by being in the right asset class at the right time, will you be able to repeat your performance going forward? Timing your entry and exits can lead to wonderful results if you get it right and it can just as easily erode your capital when you get it wrong. Are you willing to gamble or would you prefer to take risks which are more planned and thought through?

What is Financial Planning supposed to do for you?

• To start with, take a look at where you stand in terms of your financial health currently. This is done by examining your assets, liabilities, income and expenditure, investments, tax and estate plan.
• You set realistic personal and financial goals. These would include goals like children’s education, retirement, second home, etc.
• Make a comprehensive financial plan to meet your goals. The plan should address your financial weaknesses and build on your financial strengths.
• The most important part is to implement – to put your plan into action and monitor its progress.
• Last but not the least, review the plan periodically to course-correct as well as align to changed personal objectives.
Financial Planning as opposed to a plan is a continuous process and needs to be reviewed regularly to account for changes in personal circumstances, tax laws and introduction of new products.

Where does a financial planner fit in?

• A financial planner would bring in her/ his expertise.
• Will help in instilling financial discipline and focus to follow through on the plan once made.
• Will give you a third party unbiased perspective on what are often emotional, difficult decisions.

Managing your personal finances is ultimately your responsibility. However, you don’t have to do it alone. A qualified financial planner, such as a CERTIFIED FINANCIAL PLANNER (CFP) professional, can help you take decisions that make the most of your financial resources. A Financial Planner is someone who combines the technical expertise of a doctor, the discipline of a traffic policeman and the unbiased connect of a friend, to help manage and regulate your financial well being.