Time-Time ki Baat Hai – Part 3

“Look Who’s here !! Mr. Desai, Good to see you.” said Mr. Suren Mehta, a retired banker. He was sitting with few other friends, Mr. Ajit Khanna and Mr. Rajat Ghosh, in a park as their daily routine in retirement days. He suddenly saw Mr. Srikant Desai, a retired professional coming towards them, when he said this.

Retired Citizens in Park

“Good to see you all too.” said Mr. Desai.

“Let me introduce you all to my friend, Shrikant Desai. He is the happiest retired person I have ever met. He exercises, spends time with his grandchildren, goes on vacation with family and enjoys his retirement to the fullest.” Said Mr. Mehta to Mr. Khanna and Mr. Ghosh.

“You’re a lucky Man” said Mr. Khanna. “I have 2 daughters. I took loan against my PF and LIC policies and got them married in a grand fashion. Now, I am left with meagre amount to fund my retirement. I wish, I had a son who could fund my retirement.”

“Not Really” said Mr. Ghosh. “I have 2 sons. But none of them gives me enough money to enjoy life like Mr. Desai. And the annuity I earn from my policies, is hardly enough to survive. I can’t even dream of such luxuries. Retired life looks like a curse now.”

“I disagree with both of you” smiled Mr. Desai. “Your retirement planning doesn’t (rather shouldn’t) depend on whether or not you have son or daughter. It all depends on how well you have planned for your retirement.”

“We had all planned for our retirements. All of us had few policies and post office certificates for our retirement”. Said Mr. Mehta. “Additionally, we had our PF amount with us. All put together we had some Rs. 10-15 lakhs for our retirement.”

“There you are. You had only invested in traditional debt instruments which could not grow your wealth in line with inflation. As a result, you had a smaller kitty for your retirement. This amount might have appeared big during your young age. But today you realise that it is small.

To make things worse, Mr. Khanna dipped into his retirement corpus to get his daughters married in a grand fashion.” Said Mr. Desai.

“But in our community, it is mandatory to have a grand wedding ceremony Mr. Desai. Also, doesn’t a father aspire that he celebrates his daughter’s wedding in the best possible way?” asked Mr. Khanna.

“Well, may be. But the question is, if that was your aspiration, why didn’t you plan for it separately? How can a grand wedding ceremony be a justified expense at the cost of your retirement??” asked Mr. Desai.

“I think you are right Mr. Desai.” Said Mr. Mehta. “So according to you what is the right thing to be done ? Rather what’s the secret you followed that today you are so relaxed?”

“Let me Guess. Your Son financially supports you pretty well.” Said Mr. Khanna.

“Let me also Guess. You had inherited huge wealth from your father”. Said Mr. Ghosh.

“Both of you are incorrect.” Said Mr. Desai. “I inherited nothing but a small house to live from my father. Also, me and my son are financially independent. We live together and morally support each other, but neither he seeks financial support from me neither do I seek financial support from him. I think this is one reason that makes me feel proud of him and proud of myself.

I had decided to start planning for my retirement at an early age of 25. Also, I realised that only debt instruments cannot create wealth for me. Thus, I chose the way of equity which created good wealth for me. I started saving small amounts starting from Rs. 500 p.m. gradually growing to Rs. 1,000 p.m. then Rs. 2,000 p.m. and so on as my income grew.

Last year, I retired with a wealth of more than Rs. 2 Crores which I invested in Tax Free Bonds and now earning around Rs. 16-17 Lakhs p.a. as tax free interest. And I still have some Rs. 40-50 Lakhs in diversified equity funds so that I continue to beat inflation hereafter.”

“That’s great Man. What a farsightedness !! But you know what?? Equities aren’t everybody’s cup of tea. It requires lot of research to find the right stocks.” Said Mr. Mehta.

“You are right. So if you can’t find so much time to research for equities, you can choose the route of Mutual Funds. And if even researching Mutual Funds is also difficult for you, go for a fees based financial advisor.” Said Mr. Desai.

“But I always thought equities are risky.” Said Mr. Khanna.

“Equities are volatile in the short term. But in the long term, they are the true wealth creators. Also, let us analyse the risk of not investing in equities. Look at all your equity-less portfolios. Isn’t that a bigger risk that your retirement wealth is far below required as you couldn’t beat inflation?” said Mr. Desai.

“But aren’t sons supposed to fund our retirement? We do so much for them. I still remember, I gave them everything they asked for, even if it was stretching my budget. At times, I ignored my parents’ requirements to fulfil my sons’ wishes. But today, all they care about, is their children. We don’t exist for them.” Said Mr. Ghosh in an agitated voice.

“Here come the double standards. You say that when you ignored your parents to fulfil your sons’ wishes, you were right. But if your sons ignore you to fulfil their children’s wishes, they are wrong. Why so? Also, you said, that you stretched your budget to fulfil their demands. Now ask this question to yourself, whether it was a need or desire that your children demanded? If it was a need, then its ok. But if it was a desire, and you gave up your retirement planning to fulfil it, then the only person to be blamed is you, not them.” Said Mr. Desai.

“That ways I am kinda lucky” said Mr. Mehta. My Son gives me some money every month for my expenses. Also, he fulfils the demands of his children. So I would say, he is an ideal son and ideal father.”

“I would agree only if you tell me, that after all this, he is still able to save and invest for his retirement.” Said Mr. Desai.

“Well, I am afraid, not.” Said Mr. Mehta. “These days expenses are so high that after doing all this, he is hardly left with any money.”

“In that case, I would suggest you to become his mentor and tell him to start saving some money. In fact, don’t take me wrong, but your son is facing this problem because of your lack of planning. If you had planned your retirement well, the money he is giving you could have been invested towards his retirement.” Said Mr. Desai.

“So what should I do now?” asked Mr. Mehta.

“Please tell your son to prepare a budget for his monthly expenses and try to curtail those which are unnecessary. This money needs to be necessarily invested towards his retirement so that he doesn’t have to financially depend on his son. Today, my son Niraj is not only handling the household expenses very well, but is also saving and investing around 20-25% of his income towards his retirement. This way he is not only securing his own retirement but is also taking off the responsibility from his Son. In a way, he is helping his son by planning his own retirement.” Said Mr. Desai.

“Isn’t it our culture that our best retirement planning is to invest in our children?” asked Mr. Ghosh.

“That’s only half the truth” smiled Mr. Desai. “The fact is, we Indians have a culture to save for our future. In your young age, future is 2 things i.e. your children’s working life and your retirement. Now, when you give good education to your children, you are done for their future. But for your retirement, you still need to save and invest. In fact, Western Countries had a culture of not saving for retirement. There, the government had enough resources to take care of the retired. But you will be surprised to know, that the trend is changing there too, now. They have started saving for their retirement. So even ‘culturally’ we should be saving and funding our own retirements.” Said Mr. Desai.

“You have opened our eyes today” said Mr. Ghosh, Mr. Mehta and Mr. Khanna to Mr. Desai.

“Thanks for the compliments. A few last words which I would like to share with you:

  1. There has been a trend of old age parents being deserted by their children as they cannot financially support them. But if we want to curb this problem, the first step is to start saving and investing for your retirement. So this is not only a social issue, but a case of lack of planning.
  1. Tomorrow, when your children grow up, they will have enough liabilities including household expenses, home loans, children’s education, self-retirement etc. Make sure that YOUR lack of planning doesn’t mess up their finances. In fact, if you say that you care for your children, show this care by doing retirement planning for yourself.
  1. Blowing up money in daughter’s marriage is an extremely bad idea, especially when you have dip into your retirement money. Rather, help her find a good match and provide your blessings. If you have saved some amount for her, give it to her than blowing it up. That would provide some financial security to her. (Please don’t confuse this with dowry.)
  1. Your investments have to necessarily take care of inflation. If your money grows slower than inflation, your retirement planning is on the verge of collapsing.
  1. Times have changed and they will always keep changing. So keep an open mind to keep up with the times.
  1. Last but not the least. Retire from Work, not from Life.”

We look forward to your valuable comments and feedback. Please feel free to contact us on CEO@nidhiinvestments.com if you have any questions.

(The views mentioned in the article are personal opinion of the author)








Published by professorbajaj

Prof. Saurabh Bajaj is an Author, Mentor, Motivational Speaker and Wealth Planner. He has done his MBA from Narsee Monjee Institute of Management Studies (NMIMS) Mumbai, one of the top 10 management institutes in India. He holds the prestigious FRM (Financial Risk Manager) degree awarded by Global Association of Risk Professionals (GARP), USA. Till date, there are less than 15,000 professionals in the world, who have been honored with this degree. He has also been awarded CFGP (Chartered Financial Goal Planner) Certification by AAFM (American Academy of Financial Management). After his MBA, he joined J P Morgan, the second largest Investment Bank in the world. He has worked with J P Morgan as Risk Analyst for more than two years. Prof. Bajaj also holds an Advisory certification awarded by AMFI (Association of Mutual Funds of India). During his stint at Bombay Stock Exchange, he has handled Investment Management and Treasury operations of the BSE Corpus. He has set up an entrepreneurship venture in the field of Wealth Planning and Investment Consulting under the name “Nidhi Investments” and holds the profile of CEO. Prof. Bajaj sits on the Expert Panel of CAClubindia.com and MBAClubindia.com as Investment Expert. He is actively involved in investor education through his blog www.professorbajaj.com which has a readership from 78 Countries all over the world. His articles are also regularly published in caclubindia.com , mbaclubindia.com , totalca.com , charteredclub.com, bankbazaar.com and lawyersclubindia.com . He has been awarded the title of “Best Article Writer” from caclubIndia.com in Jan 2012 and has been selected amongst “Top 5 Technical Writers” from all over India in Feb 2013. He has been invited by various TV Channels like SPIN TV, CNBC TV18, UTV Bloomberg Etc for programs like "Expert Advice" , "What Markets Want ", "Budget Analysis" etc. He has been invited by Several organisations like Lions Club, Rotary Club, Agrawal Welfare Foundation, Rajasthan Mandal, Agroha Vikas Trust, Union MF, UTI MF, Arthamitra Gurukulam, Vidyalankar Institute of Technology etc for expert lecture on "Smart Investing", "Life is A Celebration", "Financial Freedom", "The Digital IFA" etc. He was ranked 8th Merit at All India level NMAT which got him selected for MBA programme at NMIMS, Mumbai. He did his MBA with Capital Markets as his specialisation. Soft Skills has become an inevitable part of every selection process and teaching learning process these days. The students from small towns and tier II cities, in spite of being talented and well equipped with technical skills, are seen struggling in the selection process. This is because of their lack of exposure to these soft skills. Mr. Bajaj has a zeal for training candidates to develop these skills and has been imparting the same on since last two years. This zeal and passion inspired him to set up his own firm called “Knowledge Circle” which aims to train candidates for soft skills. Till date, he has trained more than 5000 participants from over 220 organizations across various fields of soft skills. He has been associated with MSBTE (Maharashtra State Board of Technical Education) to conduct Soft skills training workshop for the faculties of Polytechnic Colleges in Entire Maharashtra (Mumbai Region, Pune Region, Aurangabad Region and Nagpur Region) since last 8 years. He has also been associated with ICAI (Institute of Chartered Accountants of India) for training CA Students on various topics related to Communications skills, Group Discussions etc. He was invited by Fr. Agnel Polytechnic College, Vashi for a motivational workshop for faculties. He was also invited by Vivekanad Polytechnic College for "Communication Skills and Email Etiquette" training for non-teaching staff. Apart from these, he has conducted “Capacity Building Soft Skills workshop for Faculties” at ITI Gunj, ITI Pusad, ITI Digras and ITI Umarkhed. This was the first ever soft skills workshop for faculties in the history of ITI’s in Vidarbha. He was also invited by Shivaji Education Society to conduct similar Soft skills workshops for the faculties and office staff of Shivaji Junior College Pusad, Shivaji High School Pusad, Shivaji Vidyalaya Belora and Shivaji Vidyalaya Bhojla. He has conducted training workshop on “Effective Presentation Skills” for the relationship managers of HDFC Mutual Fund, Andheri Branch, Mumbai. He has also been invited at College of Management and Computer Science, Yavatmal, College of Dairy Technology, Warud, B N College of Engineering, Pusad, B D College of Engineering, Wardha, College of Engineering and Technology, Akola, Dr.N.P.Hirani Institute of Polytechnic, Pusad etc. for the Guest lecture on “Developing Interview Skills”.

12 thoughts on “Time-Time ki Baat Hai – Part 3

  1. What you say is correct but is investing everything in Equities or MF is correct?? I think one should diverse his investment and put some money in Debt funds as well. What did you think?

    1. Very Valid point Sir. Investing “everything” in any asset class is a bad idea. One needs to follow asset allocation to minimise risk and maximise returns.

      Thanks for your visit and feedback. Looking forward to more in future.

  2. So how the investment allocation percentage should look like.
    Lets say If I can invest 25% of my total income then is 20% of it should go in Equity and 5% in Debt. Or 10% in short term MF (aggressive one) + 10% in Large cap MF/ELSS and rest Life-Insurance/FD/Debt fund – considering I am looking for medium risk + good return + Retirement Planning.
    Or there is any other more optimum formula for this???

    1. There cannot be a “One Size Fits All” Approach in Retirement Planning.
      One needs to look at several factors.
      You need to get in touch with your trusted wealth planner who can do the goal setting, risk profiling, asset allocation etc for you.

      Thanks for your visit and feedback.

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