Start organizing your money …… NOW!!!!
We are all familiar with the words “Money Attracts Money.” Let me relate a small incident in reference to the statement. There was a small boy working with a businessperson. He once overhead a conversation where his boss mentioned the above statement. The boy was very excited. The day he got his salary, he chose a five hundred rupee note, slipped it into the boss’s locker and pulled it out. The same note came out. Nothing more, nothing less. He tried for the second time, but the same result. The third time he tried, his note was stuck into the locker. The boss meanwhile was observing this entire scene unknown to the boy. As soon as the boy knew, he had been caught, he was very apologetic, and explained that he was only checking out the statement and now realized that it did not hold true. To this, his boss explained that it indeed was true, because, BIG MONEY, PULLS SMALL MONEY. His (the boss’s) big money had attracted the small money into the locker. Therefore, the question now arises- how does one create this BIG MONEY.
People can be broadly classified into three categories:
- Those that EARN and SAVE
- Those that EARN and CONSUME ALL
- Those that EARN and TAKE ON LIABILITIES TO CONSUME MORE THAN THEY EARN
While the going is good, no one wants to visualize or worry about the future, or rather, one can say, one does not want to think that the good times will ever end. The third category of the people is the ones in the most dangerous situation. One feels, that lifestyles have improved, economy has improved, but is it really so? It is most probably, we are spending today, what we would have earned over a period of 10-20 years. We are earning and clearing liabilities. Moreover, liabilities are taken but no insurance to cover the liabilities. THE QUESTION ONE NEEDS TO ASK HERE IS NOT ‘Who will clear the liability IF you die or are permanently disabled?’ This is a very important question but a glaring one that should be corrected. The ‘IF’ in the question should be ‘WHEN’. The ‘IF’ is majorly used as an excuse, for putting off the commitment towards buying a life cover, towards saving. Procrastination becomes a habit. How does one then save, for the future? For retirement? For the big money?
Retirement being the period when there will be no EARNINGS, but 365 days and many more of EXPENSES. Has one made a conscious effort to save for this golden period? Only money saved today and invested will grow and attract more money that can be used for this golden period of life. In fact, life insurance policies are sold, more for retirement provision than life insurance cover. Not that they provide one with inflation-adjusted returns, but they ensure that one is committed to saving a fixed amount every year to reach the target. No other instrument ensures compulsory saving. Surveys reveal that no one has ever consciously saved in a bank for 20 years at a continuous stretch!
Contradictory it may sound, but life insurance and retirement planning go hand in hand. The best thing to save for RETIREMENT is SELF RESPECT and the best way to SAVE is through LIFE INSURANCE. Investment planning is the tool that enables one to achieve one’s various financial goals including retirement. With each passing day, personal finances grow more complex, and with each passing day, an individual has less time to develop a personal financial plan. Therefore, the only way to do is to allow a Certified Financial Planner to handle it. It is only
October 13th, 2008 at 1:53 pm
Definitely going to a financial planner is a good option. But I don’t think that only a CFP can plan one’s retirement. Any person who knows financial market can plan his own retirement.
October 13th, 2008 at 3:48 pm
The article stresses upon the need to save and make prudent investments..it was good until the mention of CFP…I believe its not really necessary for one to approach a CFP to design their investments…In olden days during the reign of monarchs kings used to keep the money to themselves in the treasure..then why we educated lot need to invest or deposit in banks or stocks to reap interest or profits….Think about it…why create financial dependency by approachin a CFP are we trying to say that people will pay for financial advice for that matter even if someone with sound financial knowledge and experience can invest themselves then why still need CFP’s? well my friend they still not known in India to refer them for advice.
October 14th, 2008 at 4:12 pm
Financial Planning as a profession came up in the US which was very soon followed by many countries like NZ, Australia, Singapore, UK and the list goes on and on. No one other than the CFPs can advice anyone in these countries. Very soon India will also have a rule stating that any advice should be given by a CFP and not by anyone else.
It is easier said that people in India are not paying for financial advice. If things would have been like that then CFPs today would not be charging lakh of rupees and getting good business. The growing number of people looking for this kind of advice is growing and it is not very far when everyone in the country would be looking forward for this kind of suggestions.
October 15th, 2008 at 3:28 pm
If the best way to plan retirement is through insurance, then why do I need CFP??…if I will pay for the services of CFP, why only insurance when better products are available in the market??
Two contradictory statements!!
November 18th, 2008 at 5:38 pm
I totally disagree that only a CFP can understand your condition and give a best of a solution. See one thing is clear that very body can be a CFP but very body cannot become a good financial planner. I think in my opinion the best people who are in the financial markets for more than 5 years are the people to be consider for our financial planning.
November 18th, 2008 at 5:42 pm
I agree that CFP are the people who can plan your finance in the best possible manner. But all CFP as everybody can become a CFP but all cannot become a good financial planners.
November 18th, 2008 at 7:45 pm
Well sorry to say this that CFP or any other professionals can guide people but it is only our own self discipline which can help us to achieve our goals.
November 19th, 2008 at 3:17 pm
Mohsin Mahdi, i dont agree with you that everybody can become a CFP. It is not as easy as you think. In India to become a CFP you have to clear 5 modules, which can be cleared only if you have knowledge. To top that you need 3 yrs of experience. That means you just dont become a CFP because you have theoretical knowledge.. you become a CFP because you have the relevant experience and knowledge. So a CFP can definitely plan a person’s retirement planning. And I want to add one more thing that even if you have 5 years experience it is not necessary that you will be a good financial planner. There are people who have been in the industry for 15 yrs and still not managed to be good there. Mohsin Mahdi want to give you a piece of advise: you need to drink a cold glass of water.
November 19th, 2008 at 8:06 pm
Well Ajay Rathod how will self discipline help you achieve your financial goal… A cfp can help u achieve your financial goal…
November 20th, 2008 at 10:57 am
Financial planning seems to be the talk of the town these days. And with the markets touching bottoms with every rising sun, financial planning is gaining more and more popularity. And i personally think CFPs are doing a great job.
November 20th, 2008 at 10:59 am
Most of the companies claiming to provide financial planning end up selling only ULIPs. What is you take on that Ms. Khan?