How three generations of a family meet financial goals

All three of them- Rajesh, his mother Shakuntala Sinha (75) and their elder son Divij Sinha (25) have different financial goals. They are taking financial advice from Shalini Dhawan and Vishal Dhawan, co-founders of Plan Ahead Wealth Advisors, who are SEBI registered investment advisors.

It is interesting to note that Shakuntala, who is dependent on pension and fixed deposit income, maintains an aggressive portfolio with around 70% exposure in equities, and Divij, who has a high risk appetite, maintains an aggressive portfolio of equities and debt instruments. Maintain a balanced portfolio. ,

Shakuntala’s investment objective is to grow her wealth and transfer it to her grandchildren a few years from now. This long-term horizon explains its aggressive approach to asset allocation. Divij, who is pooling money for his higher education, did not go high on equities as he could not allow his portfolio to be affected by the uncertainties of the stock market. Both their investment strategies emphasize the importance of investing according to one’s needs. Here, we look at the personal finance journey of three individuals from different generations of the same family.

Rajesh Sinha, 53

Portfolio: Moderately Aggressive

At the beginning of his investment journey, Rajesh focused on saving enough money for a rainy day. So, he and his wife invested in fixed deposits, some post office schemes and an LIC policy after meeting their children’s education and other expenses. “We bought a house in the mid-2000s to save on rent during the real estate boom. My wife and I thought we did a great job financially and only against that property from a tax-planning perspective. Have looked at the debt liability,” Rajesh said.

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When Rajesh spoke to his financial advisor in 2011, did he realize that his savings would not be enough to meet his financial goals including the education needs of his three children and their retirement.

Talking about the family’s first financial plan, Shalini from Plan Ahead said, “It looked like a daunting task for Rajesh as it demanded a commitment to save around 60% of his monthly income.” Soon, Rajesh realized the power of compounding as he saw the size of his corpus grow. He gradually added new milestones such as postgraduate education goals for his children and their wedding expenses.

Rajesh said he was worried about the 2020 stock market crash amid the Covid pandemic: “I asked Vishal and Shalini whether I should cash in on my investments. But he suggested that I should not, as there was no need for funds then. 30% salary cut was taken by my company. I took advantage of the moratorium option given by the government at that time, but my investments continued.”

Shalini, thinking retrospectively that Rajesh’s portfolio would have performed better, suggested international investments long ago to ensure less volatility and better geographic diversification in her portfolio.

Still, Rajesh believes that financial advice helped him avoid taking any hasty decisions in life. “If I had continued to invest the way I did, I would have jumped into two to three jobs by now for a salary increase to generate more money. Now, I guess, I’m better off staying in one place.”

Rajesh has a plan to instill the habit of savings in his younger son, who has just joined the job: he promises to fund his higher education if the latter saves at least 50% of his income.

Shakuntala Sinha, 75

Portfolio: Moved from Conservative to Aggressive

Shakuntala tells Mint about the days after her marriage when the financial condition of the house prompted her to take up a job, which is now providing her a pension. Over the years, while her financial situation improved, Shakuntala realized that she was not efficiently managing her money (her personal savings and the retirement funds she received after her husband’s death). This sentiment was later strengthened when he lost the money he had invested in a corporate fixed deposit of Unitech Ltd. He had invested in some income-generating fixed-income products and some stocks.

“When she started with us in 2013, we suggested a conservative portfolio based on her risk profile. But it has gradually turned aggressive with higher equity exposure (70%),” said Shalini.

“I am comfortable with my pension income. I want to pass on my assets to my grandchildren. Both my sons are doing very well financially. But still, I prefer to pass on to my grandchildren. I get some satisfaction.”

Shakuntala could not get a health insurance policy as a medical condition made her ineligible for it. Hence, maintaining a medical corpus becomes an important part of his financial planning. She said, “I come under the Employees Health Scheme of the Delhi government for medical facilities. Also, I have some amount in my PPF account and debt mutual fund which can cover any emergency.”

Divij Sinha, 25

Portfolio: Balanced

Divij understood the importance of seeking financial advice long ago. “Because of my decision to join a non-profit organization, I had to join my first job for a much lower salary than my friends. But, by seeking financial advice early, I can save more than those friends of mine , who had earned twice as much as 2-3 years ago,” he said.

He does not believe in getting too closely involved with financial planning. “This is the one thing in my life that I want to land a trustworthy person with. I talk to my advisors once every few months as there are discussions about rearranging the portfolio, where to invest my money. when I need it, etc. But I never cared to check any of their decisions. You really don’t know what you’re doing, and you don’t have the energy to deal with it, anyone. And let it handle it, it’s worth the cost.”

Divij, who is now flying to the US to earn a master’s degree in computational analysis and public policy, partly financed the cost of his education using his own savings and money lent by his parents. did. He wants to return to India for work, but only after earning enough abroad to pay his parents.

Asked what his long-term financial goal is, he said, “I want to achieve some level of comfort where if I ever decide not to work for a few years, I can sustain myself without feeling pressured.” Should be able to keep. Get back into the workforce.”

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