Credo Capital

Financial mistakes are made by us all at some point or another. Many of the mistakes can be corrected ( bad investment choices, ignoring inflation and taxes, etc)  or if not at least the loss of money can be made up over time and the lesson learnt for future but some money mistakes lead to more or less ruin and these are likely when we make an emotional decision without consulting others. The biggest contributor of this kind of mistakes seems to come from within family than without.

Knew some one who was a household help,  she lived in a small space underneath the stairs near our apartment with her husband. She had some property in her name but gave it to two of her sons who have built houses in the property but have no space for their parents. Luckily for them their daughter takes care of them. A similar story was made into the movie Baghban featuring Amitabh Bachchan sometime back.

And then i came across this news : http://bangaloremirror.indiatimes.com/bangalore/others/dont-have-money-to-pay-rent-raymond-cmds-dad/articleshow/59976995.cms

Vijaypat Singhania promoter of Raymond Ltd was one of the richest man in India but today seems to have been reduced to penury thanks to having given up not only his real estate but also his shareholding in Raymond Ltd worth about 1000 crs to his son. Though this is an extreme case it is no different from the household helpers story.

As a financial advisor I come across many parents who save and invest significant sums for their children’s education and marriage which is fine but our own retirement expenses should not be ignored. Rule of thumb ( an approximation and not written in stone ) says that one needs about 18-35 times today’s annual expenses today by the time one is 60 years ( click here for the article). How many of us plan for that ? If we bring the children up with a sense of entitlement and follow up with giving up most of our earnings than we are living on hope that they will take care of us in future, and as the saying goes, hope is not a great strategy.