By Atul Surana
Father, you are greatest of all,
You gave us hope,
When we all were sad,
You gave us all strength,
When we were weak,
You showed us the path of righteousness,
When we were lost in the echoes of greed,
You showed us light,
When there was darkness & despair,
We all would never be able to repay,
The debt of joy and happiness you gave us!
Many of us buy gifts for our Dads on Father’s Day such as a watch, shirt, wallet, tie, belt, etc. A good gift is the one which is liked by the person receiving it, but a great gift is the one which is timely needed by the recipient. We have come up with 5 ideas that you should consider gifting your Dad this Father’s Day. In today’s world there may not be a better fit to the needs of a modern-day father.
1. His Dream Retirement: Your father has sacrificed his comforts for meeting your needs. Make those sacrifices count now, by helping him form his nest egg. The best gift possible for any father is the life without worrying about the regular cash flow. It is possible only by having enough corpus to generate that cash flow. Help him form that corpus by explaining him the drawbacks of investing in traditional products like Fixed Deposits, Recurring Deposits etc. Try to explain him the mutual funds in a simplified way, or by walking him through your own mutual fund portfolio. Encourage him to invest for better after tax real returns. He may be or may not be aware of the effect of compounding on wealth creation, help him remember that number crunching to enable a better decision making. Try to explain the effect of inflation on the cost of living so that he doesn’t run out of regular income during retirement.
2. His plans for grandchildren: The grandparents are more attached and concerned about the grandchildren and their future than their own kids. They typically start a recurring deposit or kids’ saving account or make a fixed deposit when the grandchild is born. Given the effect of taxation and inflation, the real return on such investments are very low. Help him choose the right investment vehicle based on the time-frame so that the hard-earned money is invested properly to generate a decent amount in future.
3. His Medical Insurance: The best way to avoid wealth erosion is to buy adequate protection for uncertainties of life. With age, the need for medical care only increases exponentially. What better way than buying adequate and comprehensive health insurance for him! Make sure that the health insurance plan covers the critical aspects necessary for his age. A good health insurance plan comes with minimum conditional claims
4. Help him clear His Financial Myths: Personal finance as an industry was always held as a taboo subject because of the aura around it. The general impression among people about personal finance is that it is complicated. But the last decade has seen a transformation not only in the way personal finance industry is perceived but also how it works. It has become a lot more user-friendly and client-centric. In case your Dad carries some of these personal finance myths, they need to be overcome. Gift him a subscription of financial magazines that publish relevant material on personal finance.
5. Fix His appointment with a Financial Planner: Just as we need a doctor if we are unwell and take the help of a lawyer in case of a legal problem that we are facing, it is the wisest thing to do to appoint a Financial Planner who would watch your back when it comes to your personal finance. Your Dad would need a Financial Planner at his age since he would be receiving retirement benefits shortly. Unless this corpus is invested in a proper asset way in a diversified portfolio under different asset classes, it would lead to unproductive and low returns-yielding investments. But with a Financial Planner to watch his back, your Dad would be grateful to you for all the right reasons.
On this special day, give him happiness for life by gifting him his Financial Freedom.
(The author is Certified Financial Planner, Catalyst Financial Planning)