A Wish to Keep

Come December and everybody starts thinking about a few important tasks which they could not take up this year but would love to do in the upcoming New Year. This comes with a feeling of guilt but a stronger determination to make it happen soon. I have a guilt of my own. I wanted to be regular with my morning walks and follow some level of exercise but that has not happened. Nevertheless, I am determined to make it happen going forward.

Managing the Risk of Unknowns

The two dreadful years with COVID have increased the need and awareness of managing the risks of unknowns for our financial wellbeing. In that context, a few commonly asked questions have become even more pertinent.

• Do I have an Emergency Fund to manage any short term disruption in our Life?
• Are we adequately covered for health insurance so that a major illness would not drain our coffer and impact our lifestyle?
• Can my family manage financially in my absence for the rest of their life?
• If I am not there, would my hard-earned assets get smoothly transferred to my family? Is there a way for us to reduce the toil for our dependents in the transition?

Have you put a solution in place to address these?

Planning for known Financial Goals

While we have started appreciating risks better, some of our normal drudgery around arranging money for our financial goals is still ad-hoc and requires a better approach. Are you grappling with some of the questions listed below?

• I may not have enough to fund all my financial goals. How do I prioritize my financial goals?
• How much money, I shall spend on the purchase of my next Car? Can I splurge?
• Should I be buying a house now or investing in Equity? Should I be considering a Home Loan?
• What will it cost to send my kid for higher study abroad? Should I get under graduation done in India or abroad? How do I fund the education?
• Do I have enough to fund my kid’s marriage or shall I ask them to chip in?
• I have a special child. How do I ensure that his/her financial needs are taken care of in my absence?
• I have a business and I am not able to keep money aside for my financial goals
• I am about to retire. How do I risk-adjust my portfolio so that I have peace of mind?
• Should I be investing abroad?
• I am planning to travel abroad soon. How should I align my portfolio?
• I am NRI planning to return to India. How will my asset be distributed across geographies? Which asset I should hold in which geography?
• I have windfall gain. How do I invest it sensibly?
• How do I create a tax-efficient portfolio to fund my financial goals?

Well, this is just a list of a few common questions which my clients have around their financial goals.  I am sure, you will have many such questions specific to your needs. Also, read Why is it risky to have adhoc approach for financial planning?

If you have been unable to address these questions so far because of the paucity of time, maybe making a New Year Resolution (wish) around this will help you make a focused effort to get it done.

I promise to share progress on my resolution next December and I am confident that I will have some good news to share with you. I too hope that you would also have put together a comprehensive financial plan in place for a worry-free life.

Wishing you all a very Happy and Prosperous New Year 2022!

The writer is a SEBI Registered Investment Adviser and Founder of FinMyn (https://finmyn.com). He provides Fee-Only Financial Planning and Investment Advisory services.

He has advised many clients in India, the US, Europe, the Middle East, South East Asia and Australia.

To know more about him, click on https://finmyn.com/about/.