Financial Planning: Malhar Majumder

Last Updated: Fri, Oct 12, 2012 07:07 hrs
​life insurance

To plan finances properly, should one address just one goal at a time or work towards saving for multiple goals at the same time?
To answer this question best, let’s do an exercise. Take a piece of paper, write your goals clearly. For example, don’t write “I would like to retire rich”; instead you could write “I would like to retire at the age of 60 with a corpus which can maintain my current lifestyle till I am 90”.

Prioritise your goals according to your requirements. For instance, if you have listed two goals, child education and retirement, then child education gets first priority, followed by retirement goal, and your assets would be invested accordingly. Thus, in a planning process, goals should be taken up one by one. Though it is easier to plan and follow one goal at a time, a comprehensive life planning approach is superior in the long run, giving a clear picture of things which could be achieved.

I am 45 and a major part of my investments are locked in real estate (worth Rs 1.50 crore today) and bank deposits (worth Rs 20 lakh). I invest in real estate as a substitute for equities. However, recently a friend advised phasing out a part of realty investment and putting the same in equities, which is safer compared to real estate. Would you agree? I have two children aged 13 and 8. I will soon have to fund their higher studies.
Any investment decision should be based on the safety, liquidity and returns the asset can generate. If you measure real estate investment with these parameters, liquidity is always an issue. Also the success of any investment depends on a balanced asset allocation, which is to ensure that if one component of the portfolio does not perform; it will get compensated by another component. Your current investment pattern doesn’t follow this conventional time-tested model. Hence, I would agree with your friend and would recommend you to move to a more balanced portfolios with exposure to equity, bonds and gold along with real estate.

A relative had nominated me on her investment in the post office’s monthly income scheme. She passed away three months earlier. Now, all the investment-related documents are with her legal heir, who is not ready to hand over those papers to me. Given that I don’t have any proof, can I claim the money at all? Please advice.
According to clause 7 of the Post Office (Monthly Income Account Rule, 1987), if the depositor nominated a person, that person is entitled to payment from the account upon the death of the depositor. However in your case, it’s advisable you take legal advice to recover the dues from the post office.

Today, Malhar Majumder, Director, Gliese Consulting, answers your questions

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