Archive for Case Study

It Takes Two to Tango

Shared values, co-operation, careful planning and meticulous execution are some of the elements that can help married couples achieve financial success.

Ritu is a dentist with a flourishing private practice while her husband Ajay is an executive with one of India’s top manufacturing conglomerates. With earnings of above Rs 3 lakh per month flowing into their combined kitty, one would imagine that this couple would have no financial worries. Alas, a close look at their finances told a sad tale of overspending, sporadic rather than regular investment, disastrous product choices, and inadequate insurance. Here are tips that could set this couple, and many other affluent ones, on the road to financial prosperity.

Shared financial values and goals.  Money is a touchy subject. Most couples tend to avoid discussing it transparently. This results in sub-optimal outcomes vis-à-vis achievement of financial goals and, in some cases, even becomes an impediment to marital bliss.

A lot of times, two people come into a marriage with different money-related values: one may be a cautious spender while the other may spend as if there is no tomorrow; one may be dedicated to saving and investing to meet financial goals, while the other might live just for the day and believe that the future will somehow take care of itself.

Shortly after marriage, once the couple has got to know each other fairly well, they should have an exchange regarding their money-related values. In due course, they should evolve a common minimum programme, comprising financial goals that they hope to achieve and a roadmap for achieving it. » Read more..

Passing on values with wealth

Publication : Business standard, Mumbai; Date: May 17 2009;

Create inheritance goals for your children.

A lot of affluent parents and grandparents are worried about the fate of their family wealth when inherited by their children. The care of money has many enemies — there is greed, taxes, inflation and foolishness and, above all, the traits and sense of the individual who has or inherits money.

Ajay Mathur, a business owner in his 60s, wanted to make sure there is something left for his grandchildren. He felt his family money was exposed to some risks. Risk of mismanagement. Risk of destructive habits. Risk of loss through divorce and marriage. He strongly believed the wealth for which he had worked so hard should not disappear because of any of these problems.

» Read more..

Book loss to benefit

Publication: Business standard, Mumbai; Date: March 22, 2009

Last April, Rajeev Sharma (name changed) sold his property for a short-term capital gain of Rs 50 lakh. Realising that his taxation will be quite high, he decided to invest some money in the dwindling stock markets.

As a result, he invested Rs 30 lakh in mutual funds in May. He sold his holdings for a mere Rs 10 lakh in October. So, he had a short-term capital loss of Rs 20 lakh. He then entered mutual funds at much lower levels. Here’s how his numbers worked out.

» Read more..

Judge this one by the COVER

Publication: The Times Of India Mumbai;   Date: Dec 11, 2007;    Section: Your Money;   Page: 40
Life insurance is for the risk of dying early, not the risk of living long. Too many people buy it for the wrong reasons
The Sharmas live in a lovely flat in Cuffe Parade. Anup, 55, is a successful businessman, and his wife Laxmi is a homemaker. Their daughters Neha and Nikita, both in their mid-to-late twenties, are married and independent. Anup and Laxmi have sizeable assets, and no liabilities. But as for their insurance…well, let’s just say it needs a bit of streamlining. » Read more..

Twice the effort: Amar Pandit

Publication: The Times Of India Mumbai; Date: Nov 25, 2008; Section: Your Money; Page: 23

MEET THE FAMILY Akshay Mathur is a corporate executive and a single parent in his late thirties. His wife, Shalini, died a few years ago. Their two 10-year-old daughters, Kirti and Poorti, are in class five. Despite a substantial income, Akshay has but a tiny surplus.

Playing dad and mom to twin girls, and earning for the family, leaves little time for financial planning. But that’s what single parents must be especially careful about. » Read more..

Plan To Diversify

Publication: The Times Of India Mumbai; Date:2008 Oct 14; Section:Your Money; Page Number: 25
A smart businessman, who had most of his investments only in business, realises the benefits of diversification
Deepak Shah, a business owner in his early forties, lives in Mumbai with his wife Radha and two daughters Rekha and Jyoti (both 12 years). He was absolutely focused on his business and had most of his savings tied to it. His business had grown well within a short period and like most owners, he invested most of the funds into business.
He always believed that his business was earning good returns and that there was no need to diversify. However, a sharp downturn and losses made him rethink on a strategy.
When we started the discussion, he felt that » Read more..

High Dose of Realty

Publication: The Times Of India Mumbai;  Date: Sep 16, 2008;   Section: Your Money; Page: 21

A high net worth businessman is shocked to discover that his returns from realty are not up to the markMost Indians think of real estate as a safe investment. Just because daily quotes are not available, they think of real estate as safer investments. They subconsciously believe that not knowing the current price of an investment makes it less risky.

Rahul Mehra is one such business owner who believed that property is a much safer investment and the only way it can go is up. With this belief, he took exposure to real estate for the last five years. In some properties, he is still making some handsome money. But in properties bought during the last 17 months, he is still in the red from a pure valuation perspective. » Read more..

Cover for terror

Publication: Business Standard, Mumbai; Date: Sep 9, 2008;    Section: Insurance;
Most life insurance policies cover terrorism. Even the process is often simpler.

In the last few days, terror has grabbed more headlines than anything else. The Mumbai incidents have left citizens badly hurt and many dead.

But after all the hue and cry about the incidents, one has to face reality. That is, an important member of the family is dead. In 2006 train blasts, there were a number of families who found themselves in deep financial trouble because their earning member was no longer there. Worse still, there were home and other loans to be paid. Many households realised rather late that they were not adequately covered for such contingencies.

» Read more..

Doctors’ Advice

Publication: The Times Of India Mumbai; Date: Jul 29, 2008; Section: Your Money; Page: 23
A couple of surgeons learns that even if you can’t cure financial risk, you can certainly control it
Swati and Jayant Pradhan, both successful surgeons in their early forties, have no shortage of money, but never enough time. They have relied on investment advice from their banks, insurance advice from their insurance agents, and tax advice from their chartered accountant. Many ad hoc decisions later, they ended up with a lot of products. So although things looked fine on the surface, their finances were exposed to several risks. » Read more..

Reality check

Publication: The Times Of India Mumbai; Date: Jun 17, 2008; Section: Your Money; Page: 23

A Bollywood hero with box office success and plenty of riches gets the ticket to financial health
Tinselworld has never looked shinier. With the boom in the entertainment industry, celebrities are clinking glasses over record numbers, be it endorsements, film contracts or reality shows. Aryan Malhotra is a star who has taken Bollywood by storm. Now, in his early forties, his pace is less hectic than it used to be, but he’s still very busy with films, endorsements, and shows abroad. His lifestyle leaves him with little time for financial matters, and he relies onhis CA and banker for advice.