We are seeing from last so many years that financial planning is essential for everyone in every way whether it is health, term or investing in mutual funds or any other financial securities.

In India, the sections that neglect proper financial planning are doctors, actors, actors.

When we talk about doctors, due to the delayed start in their career, huge amount of loan is taken for education loan which pressurize them to pay after starting their career. Due to their uncertain working hours and hard job, they do not have enough time to think about their financial goals. On their own education to upgrade their skills along with investment in the clinic, they need proper financial planning. They have busy schedules and also go on some extra work after some working hours, so they sometimes invest without knowing the pros and cons of the product. Most of the investment is done in Bank FD, RD or Insurance which is not really necessary for them. Broadly we can say that without any financial planner, they do not invest in proper asset class as they do not have time to listen or focus on the features of the products. According to me they should have a proper financial planning with a mix of equity, debt, term insurance and FD.

As far as the cast and actors are concerned, they should also have a proper financial planner. They generally have an inconsistent source of income as sometimes they get huge amount of money and sometimes, they face crisis like in recent times. It was a major disaster for these areas during COVID-19 when there was a lockdown. Uncertainty and volatility of cash flows were very common during these times so to avoid these situations they need a very good financial planner for best solutions to cover taxes and generate income by ensuring adequate savings for future . This crisis has affected many industries especially the film and TV industries. Many suicides took place due to financial constraints. To avoid this situation, I would rather request this group to have an emergency fund and a good financial planner.

How investment in equity can help teachers/defense personnel?

It has been historically proven that a person who invests in equities for a long period makes money. Teachers and Defense personnel get regular salary with annual increment so they can invest systematically in equity market and follow the rules of systematic investment.

How young is too early to start investing?

We know that starting early investing in Mutual Funds by adopting the SIP route can make a big difference. This is the only way by which we can secure our future.

First of all, we should know the concept of SIP and why we are investing. Most of the people are investing in SIP with some goals for retirement, child education, daughter marriage etc.

Systematic Investment Plan is meant to help you in your long term wealth creation. It works on Rupee Cost Averaging and Power of Compounding. This means that when the market is going down you are getting units at a lower price and once the market goes up the value of your accumulated units increases. Investment should be according to financial goals and not according to market fluctuations.

Since units are bought at every level, in the long run, once the market becomes stronger in the long run after 15 to 20 years, these accumulated units help you grow money. If you have invested based on your goals, stay invested and continue.

Let us tell you that news usually does not make money. It is the economy of the country that guides the Sensex or Nifty. I am very optimistic about the domestic economy. India will provide support to the world economy and it is expected that it will become a 5.5 trillion dollar economy very soon.

So let’s stay invested!

Views are personal: The author is Manish Vinod of RM Associates, RanchiI

Disclaimer: The views expressed are those of the author and are personal. TAML may or may not subscribe to it. The views expressed in this article/video are in no way intended to predict or time the markets. The views expressed are for informational purposes only and do not imply any investment, legal or taxation advice. Any action taken by you based on the information contained herein is your sole responsibility and Tata Asset Management will not be liable in any way for the consequences of such action by you.

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