Skip to main content

Cobbler, Cobbler, Mend my Investments!




I know a relative of mine who opts for an Insurance policy for every investment need of his. He has a friend who is an Insurance agent, and whenever my relative has surplus to invest, he calls his friend and invests the amount in whatever plan his friend suggests. So, let me ask you a simple question – is this the right approach to manage one’s surplus monies? I am sure most of you will be with me in saying a big NO. It is like visiting a carpenter and asking him to fix your fever. All our investments are to be done with a certain perspective in mind. You cannot choose one asset class for all your investments and vice-versa. For managing your investments the right way, you need to take note of few things.
1.       Qualification of your Financial Planner/Advisor: Is your Financial Advisor aptly qualified to guide you on your investments? Or he is simply selling you the products which give him the maximum commission. Your investment is not to be treated as a source of more revenue for your Advisor. You are investing because you want your money to grow and beat inflation. So, you should go to an Advisor who is professionally qualified to do that.
2.       Are you taking holistic approach towards your investments: You should not take your investments randomly. Each and every investment of yours ought to have a purpose, there should be a financial goal assigned towards it. Only if you are serious about your money, will your financial planner be serious about you.
3.       Don’t do same kind of investments every time: Your investments should be a basket of different financial products and not products from the same basket. That doesn’t mean you should have each and every product available on the face of this earth. It simply means your portfolio should be diversified enough to take care of the market highs and lows. It should not be hugely diversified.
So, make a note of these points and next time you visit your financial advisor, ask yourself a question – Are you visiting a Cobbler to mend your investments?


Charu Hastir, CFPCM is founder of www.theriteplan.com. Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit: https://theriteplan.com/index.php?route=common/home/
Labels:

Comments

Post a Comment

Popular posts from this blog

What is Financial Planning?

What is Financial Planning? One of my friends came to my place for a cup of coffee and while chatting over how life is going, where is it heading, he told me that his elder daughter wishes to go abroad for her graduation. And when I asked him that how is he planning to fulfill her wish, he just laughed it off saying that her graduation is 10 years away, why should he get worried about it now. This attitude of his made me think about the importance of planning ahead of our financial goals and how many of us are conveniently ignoring this very fact. The Term Financial Planning defines itself as planning your finances well. It is a perfect marriage between your finances and your life goals. Efficiently managing your expenses and savings in order to achieve your future goals is nothing but Financial Planning. What are future goals? They differ from person to person. Some might want to take a luxurious trip abroad and some might wish for own home. But there are few goals which m
14 comments
Read more

Should you start Big when it comes to your investments?

The other day I met a Startup entrepreneur who was just talking about the importance of starting and that also starting big. As per him, a small game or investment had more chances of failure in comparison to playing big. I could understand being an entrepreneur myself that he is only thinking about launching big obviously with the backing of some deep pocketed private equity firm. But hey, I have also seen start ups who started small and made it big eventually slowly and steadily step by step. Same is the case when it comes to investments. Should we start only when we have a big chunk sitting in our bank account or should we start small in systematic manner slowly accumulating our wealth. Let’s hear out some benefits of investing regularly rather than waiting to strike gold with the larger chunk of money. 1.        Less fear of markets If you are a regular investor who invest systematically, you don’t need to time the markets as your investments are going to the markets
9 comments
Read more

Why your Financial Plan is always Work in Progress?

Ever heard someone saying, this is my last month in the Gym, after that there is no need for me to workout ever again…I will stay fit for the rest of my life without any fitness regime. No one can retain the perfect physique forever without exercise. It is always a constant effort to stay at the desired level for almost anything that you think of. You cannot be a great chef without trying out new recipes, you cannot be a great marketer without adapting to new marketing strategies, you cannot be a great fashion designer without adapting your fashion sense towards the trending styles. Leave all of this, you even cannot even think of becoming a good parent if you don’t change from old tricks to new methods for upbringing this generation kids. If you have to upgrade your act with every other thing in life, then how your investments could be any different. The Financial Planning Process has 6 broad steps with the last one focussing on the importance of monitoring and revision of t
3 comments
Read more