Playing safe can become unsafe: Roongta
I would like to discuss a case of an old friend who was also a client, whom we were assisting (him and his spouse) in conducting a comprehensive review of all their assets, liabilities, insurance policies, goals as well as a detailed financial plan to achieve their financial goals.
The said client is an NRI couple who had intuitively made several good moves. They owned a house in Mumbai, had no liabilities and had enough life and health insurance. Moreover, they had also accumulated reasonable amount of savings over the years. Being a childless couple, their only goal was to build a substantial kitty for their post retirement. My friend being only 46 years old, his retirement was still a good 12 years away.
The only issue in their case was that all their savings were invested in fixed deposits. They were continuing to save a reasonable amount every month which he was willing to invest through a monthly SIP in an equity mutual fund. I pointed out to him that this clearly was not going to be enough and their existing savings needed to provide better returns if they were to meet their retirement needs fully.
One of our recommendations was to systematically shift a substantial portion of the bank fixed deposit into balanced mutual funds. My friend was very uncomfortable with this recommendation. He liked the safety that the bank fixed deposits offered even though a large part of the interest was being deducted as TDS which he
Be the first to comment.
