Need For A Financial Advisor

Sumit Kati

06 Jul 2017

The other day Soma was getting ready to step out of the house. Suddenly his 9 year old daughter Radha curiously asked, “Papa , you seem to be very happy today, also mamma is finding some documents in the cupboard to give you. Where are you going?”

“Yes beta, I have decided to invest in Insurance for your better future , thus I am going to the Insurance company to deposit the money.”

Radha with a confused look and innocent face, “Papa, what is Insurance? And BETTER FUTURE means?”

“Hmm, my babu is growing, she is becoming more and more inquisitive, I am proud of you beta”.

Soma stops brushing his hair, and makes Radha sit on the chair and while sitting next to her replies, “Beta these were the similar questions I had in my mind when I started thinking of investments……… Errrrr…………I mean how to handle money………”

Radha for her age was a very well balanced child, thus with curious look continued to listen.

Soma continued, “Then I spoke to Bhanushali uncle, he explained me about where the money should be kept and how he had heard Ramu making money by investing in many places.”

In the meanwhile, Dhanwantri, Soma’s wife and Radha’s mother, joined father and daughter in the drawing room. However, Radha was too busy in her own thoughts, “ Papa the same Bhanushali uncle who has a furniture shop near my school?”

“Yes beta, he not only owns the furniture shop, but also makes good furniture with his own hands. He also introduced me to Dr Sunil, who is a very good friend of Bhanushali uncle, he also gave me certain tips for good investments and better financial future.”

Dhanwantri who had been in the same room, to make her presence felt, asked “So, Aap inn sab se investment ki advice lay rahay ho?”

“Nahi, Nahi sirf insay hee nahi…” Soma continued, “I have also consulted Radha’s dentist , on what are the best investment products, I have even spoken to Sharmaji…”

Radha interrupted, “Same Sharma Uncle, who gives tasty Ice-cream every time we pass by his shop?”

“Yes, the Sharmaji who has an Ice-cream shop here and an Ice-cream factory at Anand Parbhat Industrial area”

Radha now more confused with so much of information,

“Papa, Rita teacher during our Community worker classes, mentions that, ‘If you want any furniture you go to a carpenter, If you have any problem with your teeth you should go to the dentist……’ Similarly whenever I feel like having an Ice cream I go to Sharma Uncle’s shop….. But she never told us that, they can also tell us about money….”

Dhanwantri, just recollected that she is the one who has been reiterating these things at home with reference to Radha’s books, and added, “Infact, I remember at some place it also mentions that , One needs to go to an expert to seek advice in their areas of expertise.”

While listening to mother and daughter, parallelly Soma was combing his hair, during which he realized that his hair has grown long. The background conversation hit Soma hard and thoughts stared floating around in his mind, “If my hair grows long I would go to a Financial advisor to cut it, in other words one goes to a barber to cut hair. Can’t I cut my own hair or ask somebody else to do it for me? Yet I go to an expert (barber) to get a haircut. Similarly, incase of health issues be it Dhanwantri, Radha or myself we go to a doctor (an expert in his/her own field). Infact, if Radha is not well we don’t take her to a general physician but we take her to a child specialist (pediatrician) , who is also a expert in his own field”

Suddenly, Radha’s words combined with Dhanwantri’s thoughts instigated numerous thoughts in Soma’s mind. His thoughts further extended that if ‘TAKING AN EXPERT ADVICE’ applies to almost all phases of life and most of the activities, then the same should be the case for ‘INVESTMENT ADVICE’.

Sharmaji, Dr Sunil, Bhanushali or even Radha’s dentist are all experts, BUT in their respective fields. With regards to Investment decisions one needs to speak to an Investment advisor. Soma realized what mistake he had done. However, it was not too late for correction….

Let all of us not commit the same mistake what Soma was going to commit…..

However, innocent questions of Radha helped him realize:
1) The importance of an ‘EXPERT’ in every field.
2) An expert in one field may not necessarily be an expert in the other.

A good financial advisor is like a good mechanic: you likely will need one at some point in your life, it could save you a sizeable chunk of money, and many people have no clue where to start when it comes to finding one. To further complicate matters, our industry uses all sorts of terms to describe advisors – financial planner, money manager, wealth manager, retirement planner, and so on. Regardless of their title, my question is, How does it matter what title they carry?. The advisor needs to understand my needs , requirements, financial goals , priorities, etc.

Thus, a good ‘Investment advisor’ will help one through; 1) Identifying the Financial Goals
2) Evaluating the goals
3) Prioritizing them
4) Creating and implementing the SMART financial plan
5) Monitoring the progress on periodic basis
6) Re-Valuating and revising the plan

 

When you go to an expert for all the other things in life, be it - a tailor, doctor, barber, electrician, plumber, etc, then why not go to an expert while seeking the right financial advice?

Have Referral Code?

  • Responses
  • Patidar Samaj

    - 2 hrs ago

    This article claims RJio was given a "Backdoor Entry" into the 4G Based Voice Routing. The peculiar aspect is without the Voice License, Rjio would have been a mere ISP. With the license, it is now a holistic communications service provider, with ability to exponentially scale the bouquet of products. The events indicate it was meticulously planned way before the auctions because the auctions were clear on the agenda: 4G for internet only.

Load More
mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


Banner

Need For A Financial Advisor

Sumit Kati

06 Jul 2017

The other day Soma was getting ready to step out of the house. Suddenly his 9 year old daughter Radha curiously asked, “Papa , you seem to be very happy today, also mamma is finding some documents in the cupboard to give you. Where are you going?”

“Yes beta, I have decided to invest in Insurance for your better future , thus I am going to the Insurance company to deposit the money.”

Radha with a confused look and innocent face, “Papa, what is Insurance? And BETTER FUTURE means?”

“Hmm, my babu is growing, she is becoming more and more inquisitive, I am proud of you beta”.

Soma stops brushing his hair, and makes Radha sit on the chair and while sitting next to her replies, “Beta these were the similar questions I had in my mind when I started thinking of investments……… Errrrr…………I mean how to handle money………”

Radha for her age was a very well balanced child, thus with curious look continued to listen.

Soma continued, “Then I spoke to Bhanushali uncle, he explained me about where the money should be kept and how he had heard Ramu making money by investing in many places.”

In the meanwhile, Dhanwantri, Soma’s wife and Radha’s mother, joined father and daughter in the drawing room. However, Radha was too busy in her own thoughts, “ Papa the same Bhanushali uncle who has a furniture shop near my school?”

“Yes beta, he not only owns the furniture shop, but also makes good furniture with his own hands. He also introduced me to Dr Sunil, who is a very good friend of Bhanushali uncle, he also gave me certain tips for good investments and better financial future.”

Dhanwantri who had been in the same room, to make her presence felt, asked “So, Aap inn sab se investment ki advice lay rahay ho?”

“Nahi, Nahi sirf insay hee nahi…” Soma continued, “I have also consulted Radha’s dentist , on what are the best investment products, I have even spoken to Sharmaji…”

Radha interrupted, “Same Sharma Uncle, who gives tasty Ice-cream every time we pass by his shop?”

“Yes, the Sharmaji who has an Ice-cream shop here and an Ice-cream factory at Anand Parbhat Industrial area”

Radha now more confused with so much of information,

“Papa, Rita teacher during our Community worker classes, mentions that, ‘If you want any furniture you go to a carpenter, If you have any problem with your teeth you should go to the dentist……’ Similarly whenever I feel like having an Ice cream I go to Sharma Uncle’s shop….. But she never told us that, they can also tell us about money….”

Dhanwantri, just recollected that she is the one who has been reiterating these things at home with reference to Radha’s books, and added, “Infact, I remember at some place it also mentions that , One needs to go to an expert to seek advice in their areas of expertise.”

While listening to mother and daughter, parallelly Soma was combing his hair, during which he realized that his hair has grown long. The background conversation hit Soma hard and thoughts stared floating around in his mind, “If my hair grows long I would go to a Financial advisor to cut it, in other words one goes to a barber to cut hair. Can’t I cut my own hair or ask somebody else to do it for me? Yet I go to an expert (barber) to get a haircut. Similarly, incase of health issues be it Dhanwantri, Radha or myself we go to a doctor (an expert in his/her own field). Infact, if Radha is not well we don’t take her to a general physician but we take her to a child specialist (pediatrician) , who is also a expert in his own field”

Suddenly, Radha’s words combined with Dhanwantri’s thoughts instigated numerous thoughts in Soma’s mind. His thoughts further extended that if ‘TAKING AN EXPERT ADVICE’ applies to almost all phases of life and most of the activities, then the same should be the case for ‘INVESTMENT ADVICE’.

Sharmaji, Dr Sunil, Bhanushali or even Radha’s dentist are all experts, BUT in their respective fields. With regards to Investment decisions one needs to speak to an Investment advisor. Soma realized what mistake he had done. However, it was not too late for correction….

Let all of us not commit the same mistake what Soma was going to commit…..

However, innocent questions of Radha helped him realize:
1) The importance of an ‘EXPERT’ in every field.
2) An expert in one field may not necessarily be an expert in the other.

A good financial advisor is like a good mechanic: you likely will need one at some point in your life, it could save you a sizeable chunk of money, and many people have no clue where to start when it comes to finding one. To further complicate matters, our industry uses all sorts of terms to describe advisors – financial planner, money manager, wealth manager, retirement planner, and so on. Regardless of their title, my question is, How does it matter what title they carry?. The advisor needs to understand my needs , requirements, financial goals , priorities, etc.

Thus, a good ‘Investment advisor’ will help one through; 1) Identifying the Financial Goals
2) Evaluating the goals
3) Prioritizing them
4) Creating and implementing the SMART financial plan
5) Monitoring the progress on periodic basis
6) Re-Valuating and revising the plan

 

When you go to an expert for all the other things in life, be it - a tailor, doctor, barber, electrician, plumber, etc, then why not go to an expert while seeking the right financial advice?

Have Referral Code?