The Cost Of Bad Investment Advice
I had lost all my funds and hopes due to bad investments. It was a very depressing phase of my life. I had trusted wrong people who never bothered about my life goals. Luckily, I found ArthaYantra, my savior.”
An independent, self- sustained woman, Mrs. Ravindranath, post her husband’s unfortunate death, received the insurance claim of Rs 50 lakhs after a long wait. She wanted to wisely invest the money so that both her kids could continue leading their life with no disruption.
As her husband had good earnings, he always wanted to give the best to both their kids. He sent them to the top international schools and gave the best possible care. To continue with similar lifestyle, Mrs. Ravindranath had to put her savings to best use. Her salary was not enough to cover all the expenses. She consulted many advisers and went ahead with their suggestions. She purchased multiple traditional policies largely insurances like ULIPs.
She ended up paying a premium of Rs 6.5 lakhs per year for a cover of Rs 50 lakhs but the returns were not adequate. Moreover, the remaining savings were blocked in fixed deposits, the returns from which were paltry post taxation. As a result, very soon she experienced liquidity crunch, ending up with less cash in hand.
It was then Mrs. Ravindranath approached ArthaYantra for an advice. She learnt from them that the situation arouse due to her bad investments. ArthaYantra advised her to maintain an optimum emergency fund to meet her immediate liabilities. Her earlier investments in ULIPs and Fixed Deposits were withdrawn and vested to build an emergency fund. Through a diversified portfolio, Mrs. Ravindranath could afford a house worth Rs 75 lakhs in two years.
Ignorance may be bliss for many but not in the case when you have to trust someone with your hard earned money. It is important to understand each suggestion or advice given to us regarding our investments and their implications with a long term objective.
The real life names and identity of the characters have been morphed for the benefit of protecting the client’s information.