Suresh Sadagopan

We need to be mindful of what we do with our money. Our own prejudices, behavioural quirks and biases, past learnings that do not apply any longer, psychological failings, wrong inferences etc, ensures that we do not reach the potential with our money.

We are mostly in the zone of what-could-have-been instead of being a helpful friend to ourselves. It is almost as if Hyde is in charge of our money most times!

Retirement is a phase change one will need to get used to. Many of us have lived very busy lives and have been quite active in our careers. The whirlwind activities suddenly come to a halt after retirement.

Some people anticipate the spare time and nicely plan what they will do in retirement. All of us need to do that so that this innings is interesting, meaningful, and enjoyable as well.

How will it be if one does not have to go to work to earn a living? What if one can follow one’s passion like learning music and going to concerts… or travelling the world with nary a care? What if one can set up a consultancy to earn some money, but where one can spend under 20 hours a week? What if all these can be done under 45, or better still 40?
If these thoughts have ever transited your mind, you are thinking FIRE.

REITs can be another way of investing into Real Estate which yields regular income; one cannot expect an order of magnitude returns here.

Investment in REIT could be considered as a diversification into commercial real estate which mostly investors do not have. The characteristics of REIT are quite different from a typical fixed income asset, which augurs well for diversification, though this also offers a regular stream of income like them.

In fixed-fee model, the advisor charges a lumpsum amount for an estimated amount of work, which is not connected with the quantum of assets. In the fixed-fee model, the regulation limits it to Rs.1.25 Lakhs p.a. Currently, as per IA Regulations, an AUA fee of 2.5% pa can be charged. It is wrongly believed that a fixed-fee will be cheaper and an Asset under Advice (AUA) fee will be costlier. The reality is that they will be quite near to each other.

Gifting can be used thoughtfully to assist someone who may benefit immensely from the timely gift. In fact, the value of a gift is directly proportional to the need for it by the person receiving (donee) that gift. Timely gifting is priceless.
Hence, giving gifts to near and dear ones should be based on needs rather than just passing on a legacy after one’s lifetime.

Other than Will & Trust, gifting is another option for wealth transfer. Gifting is a discretionary exercise and beyond the call of duty. Hence, it is one’s prerogative to gift or not to gift…and if one does gift, how much to gift.

The general rule is to ensure that the amounts or assets sought to be gifted would not materially affect the donor, after the event. If this is satisfied, one may gift.
Gift should be a present, in the present, when it is needed!

Smallcase is a new kid on the block, with a slightly different offering. It is interesting for some as there are enticing themes, which appeal to the investors. However, an enticing theme need not necessarily be suitable for the investor. A diversified investment option like an MF may help in broader participation in equity markets, without picking sides.

These are some of the basic principles to follow while building wealth. They are simple and yet many find it difficult to follow them; the reason why many keep talking wistfully of being wealthy but never getting there!

Retirement from active work comes to all of us at some point. Retirement is a phase change and is a very delicate operation like landing on the moon!

While we are in the earning phase, many of us tend to get carried away and end up buying properties & land in multiple places. However, managing properties across the country (and sometimes abroad) is not easy at all – along with a demanding career.