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They had the vision but needed expert advice

LiveMint logoLiveMint 01-10-2017 Kaveri Nandan

Bangalore-based couple Jaypriya Srinivas and Jaspreet Singh Chhabra have a clear view of what they want and by when they want it. And now they also have a financial plan to support their ambitions and aims. They are happy to make corrections to the plan and some other near-term adjustments for the long-term benefits. 

“I was investing in bank fixed deposits and real estate,” said Jaspreet, adding that he was not happy with the returns. The couple’s main cause of concern then was retirement planning . “There isn’t any social security in India. That was the main reason I wanted a plan,” said Jaspreet. “I also had an insurance policy. But I was very frustrated with the service,” he added. While it was poor service for Jaspreet, the reason was low returns for Priya. Both had surrendered their policies even before approaching the financial planner.

“I had three policies. We surrendered those even before we started financial planning,” said Jaipriya. 

While Jaipriya and Jaspreet knew they needed to make their money work better, they needed a plan of action from an expert. “I was comfortable taking advice from an ‘outsider’, though there was some doubt about whether we needed this (expert advice). Can’t Jassi (Jaspreet) do it, I thought,” said Jaypriya. “The first session changed that.” Jaspreet wanted a fee-only planner. “I wanted to invest through direct plans,” he said. 

They were not concerned about distance or location of the planner. “Sometimes, people get too bothered about meeting the person. In 1-2 interactions, one can make out (the suitability),” said Jaspreet. The couple’s financial planner, Piyush Khatri, is based in Hyderabad. 

The next step was making the plan. Jaipriya and Jaspreet had already been tracking their expenses, so when their financial plan was being built, the first few steps came easy. “Jaspreet is a spreadsheet person. So, getting the details was not daunting,” said Priya. The list of expenses was made more comprehensive after their planner’s inputs. “Piyush mentioned that as of now we didn’t have medical expenses, or the cost of buying a new car, or white goods. These were added,” said Jaspreet. 

Then came the difficult part—putting insurance and investments in place. “Huge amounts of changes were made. I didn’t have any mutual funds. We bought term plan, which was later increased. Medical insurance was enhanced,” said Jaspreet. 

When their son, Simar—who is now 3 years old—was born, they revisited the financial plan. “The asset allocation was changed. A more concrete plan was made for Simar’s education,” he said. The couple also bought accident insurance, and emergency funds were increased from 2 months to 6 months. 

This, however, didn’t mean other goals were compromised. “Apart from our son’s education and marriage, our goals include a retirement home. We are flexible (about the home’s location), but probably in a smaller town,” said Jaipriya. 

At present, the couple lives on rent, and prefers it that way. “We don’t plan to buy a house,” said Jaspreet. When their son was born, they moved to a house that was closer to their office. “The lesser the commute, the happier we are,” said Jaipriya. 

They could have bought a house but consciously stayed away from doing so. “At 30, I could have bought a house or put the money in mutual funds,” said Jaspreet. They chose mutual funds. “Now, I can buy a house and still have money left.” 

Jaipriya and Jaspreet had the big picture in mind; they just needed to put the pieces in place to complete the picture. A financial plan is helping them do that. “Things are in auto-mode now. All expenses are accounted for...even my parlour expenses,” said Priya. 

Both of them want to be financially independent as early as possible. “By about 45,” said Priya. And since they are confident of achieving their goals, they don’t feel stressed, and understand their responsibilities. “You are accountable for yourself. I see people buying something just to save on taxes, and only when the documents are asked for (by the employer). And then when they see the value (of their investments) drop, they blame everyone else,” said Jaipriya. She and Jaspreet, however, have managed to avoid those potholes.

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