Posted tagged ‘planning’

Book on Retirement : Retire Rich Invest Rs. 40 a day

January 23, 2010

Book written by me….

RETIRE RICH INVEST, 9789380200071

book review that I found online…

About the Book : – To most people retirement is an age. It of course depends on your health, the company you work for etc. However in the first chapter I would like to introduce you to the concept that retirement is an amount of money! After all, if you have that magical amount why not retire early?

The second chapter takes you through the steps and importance of planning, and to the dangers of not planning.

Retirement is a goal and has to be approached in a financial planning mode. Retirement Goal Setting becomes important. How much money is adequate for a person to retire? Here is a generic answer telling you what are the factors to consider while trying to answer this question. This chapter has many pointers and a calculator which leads you towards the answer.

Can you really retire by investing an amount as little as Rs. 40 a day? The answer is yes it is the power of compounding. If you do have or time on your side, it is possible to create a retirement corpus on an amount as small as Rs. 40 a day. And the fantastic thing is that this small amount can be got by making simple changes in your life style.

If you have accumulated money for your retirement, you should also know how to withdraw. Here we deal with what is annuity, what are the methods of creating annuities, what options are available, and the works about annuity.

A few chapters are devoted to answering how much and what type of insurance should you look at during retirement, the attitude of the Indian family to retirement, the need to make a will, some retirement blunders, etc.

What is interesting are the tables at the end of the book telling you how much to save and invest – and case studies about portfolio make over for retirement.

Available at the following shops:

Twistntales (Pune) Shop1, Siddarth, Gaikwad nagar, Aundh, Ph:-020-25881465 / 25899745

Paperback (Thane) Dayanand – cell no. 9967255843  022-21714414

Bookzone, Fort, Mumbai. (022-25054616/17)    All Crossword Stores in Mumbai and New Delhi.

New Delhi: Jain Book Agency (011-4151380), Land-Mark (0124-4143020), Om Bookshop (011-46075621), Pages (011-46132001).

Chennai: Landmark – has the copies. Odyssey not sure..Crossword has it..

Also available online from cnbc..check out on google..


Retirement planning: a reminder

June 17, 2008

Are you in Denial mode regarding your retirement financial needs?

I cannot comment for every one, but too many people are in denial about their financial needs for retirement. Most of us do not want to accept that we will buy 3-4 washing machines, air conditioners, refrigerators, maybe about 2-5 cars, at least one or two houses during our retired life!

And all this buying will happen with our own money – i.e. by selling our mutual funds, unit linked plans, shares, etc. and from our pensions!

Strong financial planning is the key to a comfortable retirement
If you’re planning to spend your retirement in comfort, you’ll need to rely on some pretty strong financial planning. You’ll want to take into account your current financial position and your anticipated retirement income, preparing for contingencies and unexpected expenses along the way. Then you’ll need to develop a strategy for setting aside money on a regular basis to fund your retirement financial planning and choose wise investments so your money will build as much as you need. It’s kind of a daunting task, and it’s no wonder that so many people planning their retirement are worried about the quality of financial planning available in the country.

Benefits of the top financial products for retirement planning – Critical need for Long Term Care Insurance
There is a critical financial aspect of retirement planning today. If you lose the capacity to take care of yourself and require either in-home assistance or be transferred to a nursing home, all the financial resources you set aside when planning your retirement may be spent in just a few years on the cost of health care. Long term care insurance will cover the cost of your medical needs without jeopardizing the wealth you’ve accumulated for retirement or want to pass on to your heirs. Unfortunately no such insurance is available in India as of now.

Choosing the right type of life insurance is also part of planning for the financial circumstances of retirement. If something were to happen to you before you retire, you likely would want your spouse to still have the lifestyle and financial security in retirement you envisioned in your planning, and the right life insurance policy can ensure that.

Keep reading……


First Job? Start Investing! Financial Planning at the start of your career…

February 4, 2008

Old age, death, retirement, are all very far away in life. Life is fun. You have just started earning, why should you start financial planning? And for heavens sake at the age of 23!? Well read on. Most 23 year olds are different.

Most of them have financial needs that differ materially from those of the rest of the population.

I know of one mother who has decided to make her son repay all the ‘extravagant expenses’ that he had during his college life. Making kids pay is quite un-Indian and not a regular feature in most of the relationships that I know of.

To that end, I have spoken to these kids in a generic manner and I thought I would list what makes these kids tick and must recognise the fact that the advice and services targeted toward this younger crowd might not be rewarded with an immediate meaningful commission. However it is nice to catch them young and plan a life long relationship. ?

Many demands on their liquidity

Most of us recommend that these investors sock away cash in a formal retirement plan in the early years in the hope that the accumulated savings will grow into a big round sum when the investor reaches retirement age. This is sound advice.

But given the aggression of advisors and bank relationship managers, this advice is taken to some ridiculous heights. However, these advisors must also be aware that not all investors can save money in their early years.

In addition, younger investors often need to maintain a certain level of cash so that they can purchase items such as a car, or pay a down payment on their dream homes.

Also at such a young age committing too much money into a ‘locked-in’ scheme may not make much sense, because these kids will need money to buy a car, a down payment for a house, marriage, etc.

Hence it is necessary to keep some money liquid (free) and not earmarked to any investment.This means that sometimes the best advice that an investment professional can give is for the investor to keep her/his funds in a money market mutual fund, or some other short term investment vehicle that won’t lose value.

By definition, this may also mean that the advisor or broker might not draw a sensible commission. However it is necessary to see what the investor wishes to do with some of her/his money. Hence for this class PPF, Unit linked Pension plans etc may not be suitable — at least not for a big portion of their investments.

Risk tolerance

As investment advisors are taught that the younger an investor is, the more aggressive they should be with their investments. However, this is too generic.

A young investor who is supporting a dependant family in the absence of a parent is very different from a young investor whose parents are both holding highly paid jobs or a young investor whose parents have a lot of ancestral wealth.

Also, some investors aren’t aggressive investors by nature. They simply don’t have a high risk tolerance, even if they have a higher net worth, and can afford to lose more than their peers. Advisors should realise that ‘ability’ to take risk could be different from ‘wanting’ to take risks.

Therefore, advisors need to realise that their first objective is to make sure the investor’s needs and desires are being met. This may mean forgoing the strategies that your boss may be pushing on you. It may also mean investing in asset classes drawing a smaller commission.

Supporting the family

As a result of an aging population, many young people are being forced to provide (food, clothing, shelter, health care) for their parents or grandparents. This may mean some money of theirs should also be in liquid funds to meet emergencies.

Alternatively, they may need or prefer to allocate a large portion of their investments to debt funds in order to obtain a steady stream of income and to satisfy ongoing living arrangements for their elders.Putting in so much of effort and realising that the young client is not capable of investing money in equity funds (which is what all advisors seem to be selling in a rising market) and thus the opportunity to make money is not really on and can be frustrating.

Insurance needs

Younger investors typically overlook their need for life, disability and medical insurance. They also overlook the fact that the best time to buy insurance is when they are young,?when the premiums are relatively inexpensive.

One reason of young investors not looking at insurance very kindly is perhaps the over aggressive sales pitch by a typical insurance salesperson. This may be putting off potential investors. However, if the young investor is one on whom his parents have spent money for education and this amount is a significant portion of their parents’ investment, they need to look at insurance.

If the young investor has taken a loan, supports a family, is planning to get married, s/he surely needs life insurance.

The discipline factor

Not all young investors are able to put away money each month for retirement. However, it is vital for us to instill some sense of urgency in their investors and train them to save at least some portion of their monthly pay, and then to put that savings into a retirement account such as a Pension Plan or PPF.

Far too often, advisors are focused on their larger investors, and fail to look for the Rs 3,000 -cheque their younger investors send in on a monthly basis to be added to their accounts. Employers / advisors/ brokers need to make certain that their investors follow through and consistently add to their investments.

  • This can be easily achieved by recommending that they set up a SIP system, in which the funds are automatically added to their accounts each month.

Bottom Line

The assumption that all younger investors should be aggressive with their investments, or should automatically fund their retirement plans to the maximum isn’t always correct. Younger investors have many needs and goals that must be properly exposed to all the options. And once you have made the investment keep track of your net-worth by visiting and getting the software to track your net-worth as well as file your tax return.