Financial planner: Hemant Beniwal, a Jaipur-based certified financial planner
Sharma suspected that his investments in Singapore were not going too far. “I used to continuously observe the high charges that these funds were charging me, and after accounting for those, my money wasn’t really appreciating the way I had originally expected,” he said.
The Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned at School, by Andrew Hallam. The book is a story by and of author Hallam, who was a school teacher but became a millionaire years before his retirement by following simple investment rules. Not only did Sharma decided to gift the book to his son, saying, “I didn’t want him to commit the same financial mistakes I did,” he also read the book himself. The book sensitized him to the importance of costs in mutual funds. “That’s when I realised that the mutual fund investments I had made in Singapore were not just costly but had huge exit loads if I were to withdraw them at any time. All these penalties were close to 35% of what I had originally invested,” he said. Scared but intrigued, Sharma read more books on investing.
He zeroed in on Hemant Beniwal. “I was sure that I wanted a planner who would charge me. Someone who’s answerable to me. In Singapore, my financial advisers didn’t charge me, but look at the costly investments they got me into,” he said.
First principles
Beniwal said that although Sharma was well-read when they met, his approach needed some key tweaks to suit the Indian scenario.
For instance, low-cost index and exchange-traded funds may work abroad, but not necessarily in India. “As he had sold his Singapore house and reinvested the proceeds in non-resident external account deposits, he had a very high allocation to bank fixed deposits and little in equity funds,” Beniwal said.
Beniwal also realised that Sharma had not planned for his retirement adequately, back then. Faced with a goal of funding his son’s higher education and wedding, Beniwal made Sharma realize that it would be better to part-fund his son’s education and not entirely. “He told me that I could never get a loan against my retirement. That hit me hard. I realised it would be better for my son to take up a part-time job or scholarship, in addition to my help,” said Sharma, who wants to be financially independent and not depend on his son to take care of him and his wife in their old age.
Clearing up his insurance policies—even though he lost money in them—was for the better, Sharma and Beniwal realized.
Another change he made was that, from holding about eight credit cards in Singapore, Sharma doesn’t own any now. Also, his family is involved in financial planning and the portfolio steers away from gold and real estate.
At 49 today, Sharma, who heads the metals division of his company in India, sits 40% in equity and equity mutual funds and rest in fixed deposits. “It’s still not an ideal allocation, but it’s much better than before,” he said.
Misselling
of financial products is visible not just in India, but in other
countries too.
Sharma suspected that his investments in Singapore were not going too far. “I used to continuously observe the high charges that these funds were charging me, and after accounting for those, my money wasn’t really appreciating the way I had originally expected,” he said.
The Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned at School, by Andrew Hallam. The book is a story by and of author Hallam, who was a school teacher but became a millionaire years before his retirement by following simple investment rules. Not only did Sharma decided to gift the book to his son, saying, “I didn’t want him to commit the same financial mistakes I did,” he also read the book himself. The book sensitized him to the importance of costs in mutual funds. “That’s when I realised that the mutual fund investments I had made in Singapore were not just costly but had huge exit loads if I were to withdraw them at any time. All these penalties were close to 35% of what I had originally invested,” he said. Scared but intrigued, Sharma read more books on investing.
He zeroed in on Hemant Beniwal. “I was sure that I wanted a planner who would charge me. Someone who’s answerable to me. In Singapore, my financial advisers didn’t charge me, but look at the costly investments they got me into,” he said.
First principles
Beniwal said that although Sharma was well-read when they met, his approach needed some key tweaks to suit the Indian scenario.
For instance, low-cost index and exchange-traded funds may work abroad, but not necessarily in India. “As he had sold his Singapore house and reinvested the proceeds in non-resident external account deposits, he had a very high allocation to bank fixed deposits and little in equity funds,” Beniwal said.
Beniwal also realised that Sharma had not planned for his retirement adequately, back then. Faced with a goal of funding his son’s higher education and wedding, Beniwal made Sharma realize that it would be better to part-fund his son’s education and not entirely. “He told me that I could never get a loan against my retirement. That hit me hard. I realised it would be better for my son to take up a part-time job or scholarship, in addition to my help,” said Sharma, who wants to be financially independent and not depend on his son to take care of him and his wife in their old age.
Clearing up his insurance policies—even though he lost money in them—was for the better, Sharma and Beniwal realized.
Another change he made was that, from holding about eight credit cards in Singapore, Sharma doesn’t own any now. Also, his family is involved in financial planning and the portfolio steers away from gold and real estate.
At 49 today, Sharma, who heads the metals division of his company in India, sits 40% in equity and equity mutual funds and rest in fixed deposits. “It’s still not an ideal allocation, but it’s much better than before,” he said.
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