Mint recently spoke with a Bengaluru-based family about its decision to seek the guidance of a registered investment adviser (RIA) and how their financial plan is now helping them achieve their goals.
Neeraj Gupta, 37 and his wife Etti Gupta, 35, both IT professionals, managed their family finances on their own until 2019. In 2017, he met with a road accident. Though he escaped largely unscathed, it set him thinking on the need for proper financial planning. “I was quite scared about my family’s future prospects in the event of something untoward happening to me. I wanted somebody to help us plan our finances,” says Gupta.
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In 2019, Gupta approached Abhishek Kumar, a Sebi-registered fee-only adviser. “Our finances were in a disarray. We did not have a structured plan and relied mainly on insurance provided by our employers. Abhishek helped us reflect on our short-and long-term financial goals,” says Gupta.
Kumar advised the family to build an emergency corpus in the initial few months, ensuring enough funds was set aside for unforeseen expenses—crucial for scenarios like job loss in the volatile IT sector.
The family next opted for a comprehensive family floater plan with a basic coverage of ₹20 lakh and a top-up plan of ₹1 crore, totalling an annual premium of ₹25,000. “We got an additional health cover as we could not just rely only on the health insurance provided by our employers. That would not be enough to cover all our medical needs. Besides, in case of a job loss, you could lose coverage” adds Gupta
Apart from the term life cover provided by his employer, Gupta also decided to get an additional term insurance to tackle rising inflation and take care of the family’s increasing lifestyle expenses. Gupta now has a life cover of ₹3.5 crore with an annual premium of ₹60,500, while his wife has a cover of ₹2 crore with an annual premium of ₹35,000.
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Gupta also opted for an accidental cover that provides protection against various disabilities, both temporary and permanent. The sum insured of this policy is ₹1 crore, and the annual premium is ₹9,300. This policy ensures financial support in case Gupta is unable to rejoin work due to any accident in the future.
“While health insurance usually covers illness and natural injuries, accidental cover is separate and helps with costs arising from accidents, like injuries or disabilities,” says Kumar, RIA, Sahaj Money.
Prior to his meeting with Kumar, Gupta’s investment portfolio had a large allocation to real estate. He had also invested in several money-back insurance plans and ULIPs (unit linked insurance plans) to fund his future retirement life but later found that these plans offered lower returns and were not the right fit.
“In 2013, my parents asked me to invest in real estate, and I ended up taking a home loan towards this end. However, in 2020, we closed the loan and noted that the property was not yielding significant rental income, and we weren’t using it ourselves. We made the decision to sell the property in 2023. This freed up a substantial amount of capital that was previously tied up in real estate,” says Gupta.
Before seeking Abhishek’s advice, Gupta says his investment portfolio was quite traditional, with a heavy tilt towards real estate and a small portion dedicated to regular debt mutual funds, fixed deposits (FDs), and money-back plans, most of which were usually bought on the advice of his father’s friends. “However, with Kumar’s guidance, we shifted to a more balanced approach. This shift in our investment strategy has not only diversified our portfolio but also aligned our investments more closely with our financial goals. We now feel more confident about our financial future and for long-term goals like retirement and children’s education,” adds Gupta.
Sharing his experience about fee-based advisory, Gupta says “We really appreciate Kumar’s approach. He used to consult us, but let us take the decisions on implementing his financial plans.”
Gupta said his family’s asset allocation has since changed from 70% in real estate and 30% debt mutual funds to a more balanced 50:50 in favour of equity MF and debt MF allocation, which they regularly rebalance. “Getting the risk profiling done helped us in planning our investments and building the right asset allocation” adds Gupta. The family currently resides in a rented house in Bengaluru but is open to the idea of buying a new house and settling down there.
Next on the Guptas’ roadmap is financial freedom. “Financial independence means having enough money to live life your way without needing to work all the time. It’s not just about retiring; it’s about having the freedom to choose how you spend your time,” adds Gupta. The family is confident of achieving financial independence in the next 10 years and plan to accumulate ₹6 crore. To achieve this target, they invest approximately ₹3 lakh per month in mutual fund (MF) systematic investment plans, sometimes increasing this amount when they receive bonuses or commissions.
Their investment strategy includes planning for their children’s education. They have a six-year-old son, for whom they are saving in MFs to accumulate the required funds by 2035 when he turns 18. Their second baby is due soon. They have already set a long-term plan for the baby, expected in April. They are committed to achieving these goals through disciplined saving and investing.