In an interview with Shweta Dhoka of Myiris.com, Ashish B Shah , certified financial planner, Finsolve, says,''The biggest challenge faced by the families today is the savings pattern and short term thinking. The cost of living today has increased where as the income has been deteriorating.''
> How did you start as a Financial Planner? What services do you offer?
I am a certified financial planner and I have been practicing financial planning since 2007 under the firm Finsolve. We offer comprehensive as well as piece meal financial planning consultation including alternative investment opportunity and product offering like direct equity, mutual funds, insurance and property investments.
> What do you feel is the biggest mistakes people make regarding money management, and how can it be corrected?
The biggest mistake as per me, people make is the hear-say attitude, where without actually understanding the underlying they are lured by the projection of high rate of returns on the investment shown to them by their so called advisors.
> What investment scheme you would suggest to a cleint who has to sum up his saving for his daughters marriage after 5 years?
The period being short higher exposure to risk would be inevitable and hence for the period of 5 years one can invest in a mix of assets viz 50% in direct frontline equities or mutual funds, 20% in corporate bonds and the remaining 50% in either debt funds / income funds and short term GILTs.
> What is your take on the additions that are made to RGESS? Will it really help commen man to invest?
This scheme as per me has no direct benefit to the investors as risk averse investors (who do not possess any equity investment) would hardly think of taking tax benefits risking their capital. It is very difficult for me to believe that this scheme can enhance retail equity participation. Yes mutual fund route can be of a benefit to an extent but as it is the same can be availed in the form of tax saving schemes.
> What are the most common challenge a family faces these days with their personal finances?
The biggest challenge faced by the families today is the savings pattern and short term thinking. The cost of living today has increased where as the income has been deteriorating. This has led to nil or minimal savings and any major event can lead to catastrophic loses. In a nut shell there is no balance between savings and expenditure.
> What should the retail investors do in the prevailing market conditions?
In the prevailing market conditions the retail investors should look forward to long term investments ie for the period of atleast 3 to 5 years and select only frontline stocks in equities. Look forward to alternative investment opportunities.
> Is there any thing that you would like to share with our readers?
As is always said that we need to be strong on our fundamentals and basic fundamental of an Indian family is to save atleast 30% of their average income. If that is followed the word recession / mandi will be far off from this country. Today there is a huge shift in the poverty line. The riches are becoming richer and the poors poorer. This situation can be changed the next generation needs to excel in innovation and discovery but the basic principals should not be changed.
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