Insights into retirement....

(The author is a financial planning coach,founder and CEO of Money Avenues, a Wealth Management firm based in Chennai.Mail your views to reachyourcoach@yahoo.com)

Insights into Retirement/ Pretirement


There have been several insights into retirement/ pretirement patterns. A recent survey captured some of the trends in retirement planning which are worth making note of for our benefit. A gist of the survey has been provided here for our readers...


1. Among other things,  GOOD FINANCIAL PLANNING has been ranked the most important tool for a happy retirement life.

2. On the comparison with our parents' generation, lack of security in career and jobs is ranked on the top of the list. Which in essence means we need follow a financial plan and that too to be implemented @ the earliest in our lives. The next on the list is on the lower returns on our investments.

3. Top financial worries on the retirement is about the unexpected events, followed by rising health costs and lack of performance in one's investments. Hence the importance of financial planning...

4. Most importantly and interestingly, the survey finds people who make financial plan have more savings and investments for their retirement life than the people who do not follow a plan.

Speak to experts @ Money Avenues NOW to make your retirement/ pretirement plan.

(The author is a financial planning coach,founder and CEO of Money Avenues, a Wealth Management firm based in Chennai.Mail your views at:  reachyourcoach@yahoo.com)

Cloud financial planning...

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai.Mail your views at:  finplancoach@gmail.com)

Cloud Financial Planning...


Our lives are getting more and more "Clouded" these days with advent of things such as cloud computing and iCloud. Let's also apply the cloud technique in our personal lives. Precisely in our own financial planning....

The financial planning can be complete only if it's properly linked to the various components of our personal finances. Our other personal priorities and work stress play havoc in our personal finances, leading to chaotic personal financial plans. Cloud financial planning has many components which are important ingredients in making an effective financial plan. They can be -

• Future goals.
• Smart investing.
• Adequate life insurance.
• Tax Planning.
• Child Future.
• Pretirement. 

Based on each individual, the plan changes or expands depending on the goals and priorities.


Consider making a financial plan NOW.... Cloud your life with a vibrant financial plan.

Speak to experts @ Money Avenues to make your financial plan.

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai.Mail your views at:  finplancoach@gmail.com)

Do you plan to "Pretire"? Read on...

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai.Mail your views at:  finplancoach@gmail.com)

Do you plan to "Pretire" from work? Read on...

People opt for "pretirement" than retirement these days.
Calls of passion lead to pretirement, which basically means cut short your present career and choose something else guided by your passion.

 

"I ME MYSELF" syndrome is catching up like anything. People like never before are willing to explore things outside their organizations and careers. "Woodian" outlook is catching up fast with the current crop of professionals and executives.



To know more about John Wood's inspirational story....

http://www.leavingmicrosoftbook.com/author.html



Pursuit of passion has triggered an increasing urge among the people to "pretire" from "job", if not retire from jobs. This is because of variety of reasons.. Passion may be for turning into an entrepreneur, take up social work, pursue different career paths, pursue other hobbies or just play golf...

The age old retirement milestone of 58 years is getting drastically shrunk which is reflected by rising urge for people to break away from the convention. For instance, my father had a career with government for cool 35 years, which is unimaginable these days. Though the average shelf life in current careers has shrunk, the higher salaries make up for the shrunken shelf life of our jobs.

And interestingly such deviation from our regular journey may happen in a trigger's moment and may not be according to the script. John Wood's one trekking adventure changed his life forever. But remember, this kind of a scenario can still be handled effectively if meticulous planning has been adopted in the early stages of life. A sound financial plan early on can only support such moves by passion driven people.


Now, what do you have to do to handle "Pretirement" passions?


1. Identify your goals and keep revisiting them constantly:

"To get started, you must have a destination" 

--These are prophetic words on goal setting. You must try to figure out your goals early on in your life. And more importantly you must revisit them time and again for changes to be incorporated. And remember, goals come @ a financial cost to you. Start working on your goals in order to identify and pursue them.

2. Start investing early:

Obviously you cannot start planning to invest @ 40 and plan for pretirement at the same time. Start your investing much early in life ideally through the route of easy monthly investments (EMIs). Never wait for "tomorrows" to start the financial plan as there is a huge cost for delays you might have to pay in the absence of it.





3. Start investing smartly:

Just starting the investment early is just not enough. The investing should be smart and aimed at long term wealth creation. Keeping one's money in low yielding avenues will not help one to plan for pretirement for sure. Seek the assistance of financial planners to earn more out of your savings.



4. Have enough health cover:

Organizations provide health cover to an extent while during the stay there. But once out of the organization, one has to be independent and self dependent. It's advisable to have a parallel health cover even during the career as its cost effective if taken much early. Imagine I decide to pretire @ 45 and try to seek a health cover for myself and the family. It will be lot more expensive and time consuming than taking such a cover @ 30. And remember the health care costs are sky rocketing.





5. Have enough life cover:

  

Having ample cover for one's life will be critical while making decision to pretire. The reason being, the family in many cases will be dependent on this kind of financial security in one's absence. In simple words, life insurance is nothing but a financial cover for one's family in his absence. Simply put, Mr X is covered for his life for 50 lacs @ the age of 40. At 45, mishap strikes to take away Mr X. On this event his family gets Rs 50 lacs as financial compensation. It is an important component of a financial plan because, any mishap at a later stage should not in any way impact the family's financial future. So in a way this is a contingency fund for a family.

6. Plan for your child's future:

Planning for child's future should precede the pretirement plan of an individual. Like our passions, the children are also typically guided by their passions, aspirations, goals and objectives. And they definitely come @ a huge cost these days and the future is even more scary with the surge of educational costs. So plan early for their future to ensure a smooth pretirement plan for yourself.


  
7. Plan for Pretirement/retirement NOW:

 

Make a financial plan NOW keeping all the above factors in mind. 


1. Have goals.
2. Start saving early.
3. Start saving smartly.
4. Have a good health cover.
5. Have ample life cover.
6. Plan for your child's future.
7. Make a plan NOW...


"To get started, you must have a destination". 

This not only applies to your goals, but also for your financial planning.

Speak to experts @ Money Avenues to make your financial plan and realize your pretirement goals

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai.Mail your views at:  finplancoach@gmail.com)

Financial Planning for future: Building block by block.....

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

 

Building block by block is how we learnt to count the numbers and alphabets in our childhood. And that's what we practice on building our lifestyles through EMIs for buying homes, cars, expensive TVs. But this EMI which is equated monthly instalment typical creates liability and not exactly the asset. But in essence, we follow the basics of a kindergarten kid. Achieving bigger things block by block....


Same is the case with our financial planning. Achieve bigger things in life block by block through EMIs.

Easy Monthly Investments (EMIs)

EMIs (Easy Monthly Investments) are key to achieving our financial goals through the financial planning. And they help you create long term assets.

Easy monthly investments can help you achieve your following financial goals:




1. Inflation Shield:

Inflation is a monster which is capable of derailing the best of all future plans, if not handled the right way. To begin with, It's not prudent to keep much of your money in a bank savings which earns 3.5% pa.. And compare that with inflation which is around 10-11%. Instead do an EMI into products like equity which can effectively beat the inflation hands down and generate good returns over the longer periods. Inflation hedge will have to be a key financial goal for the future and suitable investment strategy should be built around that goal.

For eg., 

If you keep 1 lac in a bank savings a/c, after a year it would have given Rs 1,03,500 @ 3.5%.

On the other hand, had you parked the same 1 lac in an avenue which earned 15%, it would have given Rs 1,15,000. This difference is only for one year. But this equation can cause havoc over the longer term due to the effect of compounding. Keeping money in the bank is definitely not the right option to fight the inflation monster.

Have a set amount every month through an EMI for your regular saving into an appropriate avenue. Remember, saving alone is not important.

2. Long term wealth creation:

Inflation hedge is just a part of the overall investment strategy, the larger aim should be to create long term wealth creation. The Easy Monthly Investing (EMIs) is the best possible way to create long term wealth and to meet the "expect the unexpected" situations.

3. Personal life cover:

In simple words, life insurance is nothing but a financial cover for one's family in his absence. Simply put, Mr X is covered for his life for 50 lacs @ the age of 40. At 45, mishap strikes to take away Mr X. On this event his family gets Rs 50 lacs as financial compensation. It is an important component of a financial plan because, any mishap at a later stage should not in any way impact the family's financial future. So in a way this is a contingency fund for a family.

As one grows in career and income levels, its ideal that the person should always maintain the insurance cover at the prevailing income levels. For eg., X's salary is 10 Las PA and he has a cover of 50 lacs. If his salary moves up to 15 lacs after few years, his insurance should also increase correspondingly, in this case it should go up to 75 lacs.

Thumb rule for taking an insurance cover is "earlier the better" which means the cost of cover goes up with one's age. Two people aged 30 and 40 will have substantially different premiums for the same amount of cover. 

And opting for life insurance through EMI is always the easiest option in a financial plan.

4. Children future plans: 

While planning for a child's future easy monthly investments (EMIs) will be very handy  both through annuities and equities. It's also important to start the planning right now keeping in view of the future costs. In our estimates, cost of professional education which is Rs 7.5 lacs now can be Rs 61 lacs after 15 years. So EMIs will help you plan for such financial goals and "expect the unexpected" situations in their future plan.




5. Pretirement planning:

There is a growing urge to pretire in life. Pretirement means many things; retire from work, start own venture, work for social causes, or jus play golf all the time...

Typical every one wants to pretire from job, but not from income. The ideal way to create our pretirement fund is take the EMI route and create wealth for our pretirement goals.


Speak to experts @ Money Avenues for the best financial planning solutions and build your financial goals block by block.

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

When education becomes more precious....

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

In a rather peculiar and bizarre incident, a distressed dad in the US put his precious collection of 19 Rolex watches on eBay for auction.......

http://www.hodinkee.com/blog/2011/6/7/man-lists-19-rolexes-on-ebay-in-hopes-of-sending-child-to-co.html

The reason:


To fund his son's college education at UCLA (Univ of California, LA) ............ 




When there are other better ways to fund children education, why do things which are distress in nature. One such tool is to make a children education plan right now when the child is relatively young; and that can be definitely handy when they get ready for their education. After all, inflation is galloping on every side of the economy. Education cost will not be an exception to this.




In our estimates

• A professional education which may cost Rs 7.5 lacs now, will cost about Rs 61 lacs after 15 years. 
• Overseas education which may cost Rs 15 lacs now, might cost about Rs 1.23 Crores after 15 years.

Talk to experts @ Money Avenues to know and make perfect children future plans.....

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Brace yourself for "certain" uncertainties.....

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Brace yourself for "Certain" Uncertainties:

One thing can be certain is the Uncertainty.... In life, in careers, in every of walk of life around us. And the reality is that no one can prevent it, but one can very well be prepared for it. And there are tools to prepare for uncertainties in life.. One such tool is "Financial Planning"......... 


Financial planning is a tool which matches your financial earnings with your financial goals, taking various factors as ingredients.

Now let's see the 7 most "Certain Uncertainties":

1. Sky rocketing Cost of Living:

Like it or not, cost of living is sky rocketing as never before. It's going to impact the plans drawn up for the future. Be it children education or future planning or retirement planning, the inflation is going to play a vital role. One thing is certain; that the inflation is set to rise further in the future. What is uncertain is the kind of rise that could take place and the extent to which its going to impact the future plans. Only financial planning can be a shield to tackle this.

2. Longer life span:

Thanks to modern medical technologies, people live longer as compared in the past, which is very good. But living longer also translates into higher costs of maintenance and health care expenses. Post retirement, the costs of maintaining the life style have to be carefully planned. With improved technologies, the longevity is set to rise in the future along with the health care costs. It's important to make a financial plan for the future to tackle uncertainties.

For eg., if one were to retire today and need a retirement fund of Rs 25 lacs, can you imagine what would be the same after 20 years? It's Rs. 4.10 Crores.



3. Shrinking returns on investments:

Returns on investments is shrinking in the present and could be shrinking even more in the future because of variety of reasons. But primary reason is that our lack of time to plan can kill the potential returns and more so when all our monies are parked in the bank account. On a relative basis vis-a-vis the inflation, the returns are set to nosedive if not planned and managed well. Gone are the days of high returns in the plain vanilla investment products where you just invest and forget. Only a specialist like a financial planner can guide you for maximizing the returns over the longer run.


For eg., if you are going to park Rs  1 lac in bank savings a/c @ 3.5%, after 10 years it would have become just Rs 1,41,060. But if you had parked the same 1 lac @ 15% investment avenue, can you imagine the returns after 10 years? It would have been a whopping  Rs. 4,04,790.... That's the difference a financial plan can make......

4.Clutter of investment options and choices:

Innovation in the financial products space will lead to invention of many products and avenues for our investments in the future. Busy and working professionals cannot be in the loop of these things for practical purposes, because tracking them is not their job. But this difficulty can potentially lead to huge loss of returns for the investors. As in the case of previous example, by just leaving the money in the bank can cause you a huge potential loss of returns. After all, the problem in the future could be because of plenty and not because of lack of avenues.

5.Ever expanding goals and aspirations:

Our aspirations and goals are ever expanding and they keep changing over the time. More so now, with the fact that there is a huge mobility of professionals to various parts of the world creating new aspirations and goals. Unlike our previous generations, when they were content with their limited goals and aspirations, the future is going to be ambitious and restless. And such aspirations and goals come @ a huge cost. So be prepared for it and make a plan accordingly.

For eg., what you might have planned five years back for protecting your life through insurance may not be relevant today. What you might have planned for your retirement five years back may not be relevant today. Because the goals and the aspirations of the people change quite rapidly.




6. WANTS becoming NEEDS:  

The rapid changes in our lifestyles have also resulted in ever increasing changes in our needs and wants pattern. This trend will indeed witness a sharp rise in the future as well, when more and more sweeping changes occur in the lifestyles.

For eg., Foreign education may be a want today; but a need tomorrow..... 

Remember, Today's WANT is tomorrow's NEED......





7.Ever changing life priorities:  

Priorities in life keep changing and they happen @ a rapid pace. What was a priority yesterday may not be one today and most certainly not for tomorrow. With the kind of work and careers we go through, they ought to change quite rapidly. It's difficult to foresee priorities 5 years or 10 years down the line. But a financial plan can handle this uncertainty quite well as it also tracks and incorporates the changing priorities very efficiently.

A disciplined financial plan can bring in lot of certainty in the world of uncertainties..Expert @ Money Avenues can help you make a sound financial plan. 

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)