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Financial planning gets you to the good times and past the bad times

LiveMint logoLiveMint 20-08-2017 Kaveri Nandan

For Kolkata-based Anirban Sarkar, 2011 was a financial watershed. Before that he was “leading a bachelor’s life.” In 2011, his post-marriage life started. “I had no savings earlier, but after marriage there were more responsibilities,” he said. He met Uttam Kumar Sen at a financial well-being campaign, and Sen went on to become the couple’s financial adviser. This led to the Sarkars having a sturdy plan that stood the test of time when Anirban was without a job. Sen also helped them organise other things, due to which they are now confident about their finances. 

Getting on track 

“I had randomly bought insurance and mutual funds from friends and family. I even tried equity, but that was a bad experience,” said Anirban. Having burnt their fingers with equity, most of Sarkars’ savings were in fixed deposits. A lot of this changed. “To begin with, I was a conservative investor. But I learnt how equity was good if used properly,” said Anirban. Their portfolio’s asset allocation was recalibrated based on their risk profile. “About 85% was in debt. Now, about 75% is in equity,” said Anirban. 

The Sarkars also had too many life insurance policies. These were closed down. “We bought term insurance; we didn’t have this earlier,” he said. Their health insurance cover was enhanced to cover Anirban, Susmita and his parents. 

Through ups and downs

The basic aim of a financial plan is to help the family fulfil its goals and cope with tough times. Susmita and Anirban have been able to do that. 

As part of their financial plan, they built an emergency fund. This helped them in 2016. In 2015, Anirban had moved to Mumbai to work for a US-based company but it shut operations the next year and Anirban was out of work for about 2 months. “Those 2 months were difficult, and it (Mumbai) was a new city for us,” Anirban said. “When that company closed, it (emergency corpus) helped a lot,” said Susmita. 

The financial planning also helped them buy a sports utility vehicle (SUV) without taking a loan. “This was a big dream,” said Anirban. “We thought we would have to take a loan, but we finally didn’t have to,” said Susmita. 

Systematic saving and investing made them more confident about their goals. “We learnt how to cut expenses without hampering the essentials,” said Anirban. During the initial period, the Sarkars had to give details of each and every expense to Sen. “There was also a profile test. He (Sen) even sat with my mother because she was worried,” said Anirban. As a consequence of this exercise, the family reduced eating out, shopping and other non-essentials. “Now we prioritize... all this adds up to a large chunk,” said Anirban. 

Among their long-term goals is education of their daughters: 3-year-old Sharanya and 3-month-old Ananya. “When our first daughter was born, we started planning for her education then itself,” said Anirban. It was the same for the younger one. Most of these investments are in equity mutual funds. “He (Sen) first made me understand equity, that it is not for the short term. We are in the fourth year of planning and I have gained confidence in how it works,” he said. 

Retirement is the next long-term goal. “I don’t have a government job, so we have to take care of this (pension) ourselves,” he said. 

The Sarkars also have a home loan, which Anirban had taken about 9 years ago. “I will pay it off in another 3-4 years,” he said. An international vacation once every 5 years is another goal that they are confident of achieving. “We are more confident now; we feel safe. Earlier, our savings were not systematic and we had many worries. Now we are sure that our children’s future is secure and our lifestyle will be maintained,” said Susmita. Anirban echoes these thoughts: “I get little time to spend with my family. But I know that I just need to follow this, and I am through.”

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MY PLAN

Name: Anirban Sarkar

Age:35

Profession: Senior product manager with a national ply board company

Name: Susmita Sarkar

Age: 33

Profession: Homemaker 

Financial planner: Uttam Kumar Sen, certified financial planner, and blogger at moneyplanner.co.in

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