Three years ago, I got an opportunity to meet with a prospect. One of my existing clients referred him. He holds a very good managerial position in his organization. On the very first day of our meeting, he told me to suggest some good Mutual Fund Investment in which he will start sip on monthly basis. I asked him to answer why he wanted to start SIP in Mutual funds. He replied that his boss had recommended him to meet an advisor and start sips as he had benefited from such investments.
At this point, i asked him about his financial goals? He replied that he does not know much regarding his financial goals. He kept insisting about schemes, but I was trying to find the reason to invest from him. Suddenly, I saw something written on a whiteboard inside his office. I drew his attention towards that white board and asked, Sir what is this? He told that, this was his company’s annual target, which he along with his team had to achieve. I got the clue and told him that he knows his company’s goals but was not aware of his family’s goals. Moreover, would he mind if I would help him to find out his own financial goals? Suddenly he understood that there was something amiss in his personal financial life.
Again I asked, when he would like to be retire, he answered that in his company , retirement age is 58 year, but he don’t know whether his company will keep him till his age 58 or he would have to leave before that. His answer was enough to make him understand the risk associated with his Planning for Early Retirement and need for retirement planning.
He kept his all work aside and started conversation with me to know more about his financial goals.
They were eagerly waiting for me to come. He introduced myself to his spouse and already briefed the discussion we had with him earlier in his office. After having a cup of tea together, she told me that she is having two well grown up sons who were reading in class seven and eight respectively, and they will be requiring huge amount for their higher education seven or eight years later. However, the money we are having is not sufficient to meet the requirement. So please suggest me the way to save and how much to invest so that we can accumulate the descent amount in near future.
This was the second financial goal I came to know from them. He was earning a handsome amount, but his savings was not proper. Even he did not have a single insurance policy running on his life. I suggested him to take an Compare Best Life Insurance Policy immediately and start sip in mutual funds.
From last three years, he never asks me about the NAV of his fund, he left everything on me and does according to plan. Now he is feeling more secured then what he was 3 years ago. He always refers his colleagues to do financial plan. Now he is very much concerned about fulfilling his goal rather than worrying himself from vicissitudes of stock market.
The story is common among many investors. They do know their financial goals. Even if some of us do, very few translate these into specific numbers. Defining a goal is essential as it has a direct impact on deciding the route you choose to achieve it. For instance, if your objective is to save for a house a year later, you will need to be more conservative in your approach due to paucity of time.
However, if you are planning for your Retirement Planning, which is 25 years away, you can afford to invest in asset classes like equity. I have seen so many people who had an insurance policy one his car, but didn’t have even a single life policy on his life. Their car is more important than his own life to his dependents. People knows about the goal of their organization in which they are working, but never tries to find out their own goal which helps him rather motivates him to earn money. It is the investor’s goals, which helps planner to suggest instruments to invest into, do proper assets allocation and optimized the return from available resources. Remember
Dream + Date = Goal.