Conversation Over Lunch
CFP Vaidy & His
Cousin Balaji
“Finally back home!” laughed Balaji as he slid into the
restaurant booth next to his cousin Vaidy. Like every visit to India, he had
dropped into the cousins’ office unannounced, pulled them out in the middle of
a busy workday, and whisked them off for lunch.
“How’s life in the US?” asked Vaidy.
“Good now… but I had a bit of a scare two months back,” Balaji
replied. “I was laid off for nearly eight weeks. Nothing to do with performance,
the company was restructuring. Luckily, it all settled and they rehired me, but
those two months were stressful.”
“You never mentioned!” said Vaidy.
“I didn’t want to alarm the family. And honestly, I thought I
was secure, good salary, solid lifestyle… why worry? But then I remembered the
COVID years. Some of my close friends lost jobs. One had to sell his car to pay
hospital bills when his father was infected. I had promised myself back then
that I’d maintain an emergency fund… but I got complacent.”
Vaidy nodded. “That’s exactly why we keep emphasising the
emergency corpus when we advise clients.”
Balaji sighed. “I thought insurance would cover everything.
But when my dad fell sick, the insurance deductible and co-pays were huge. I
had to swipe credit cards. Paid interest for months.”
“This is precisely what we see,” said Vaidy. “People think
insurance is enough. But certain out-of-pocket expenses, job loss, temporary
salary cuts, even natural disasters, they need immediate liquidity. If there’s
no emergency fund, people are pushed toward loans or forced to sell investments
or property.”
Balaji nodded thoughtfully. “When I got laid off recently, I
realized how fragile things can be. I had savings, but all locked in retirement
accounts or long-term investments. Withdrawing early would attract penalties,
and selling them when markets were down made no sense.”
“That’s where the corpus helps,” Vaidy added. “Ideally 6 to 12
months of expenses - liquid, accessible. It protects retirement goals, provides
peace of mind, and keeps debt away. And during a market downturn, having cash
ready gives flexibility to seize opportunities rather than sell in panic.”
They paused as lunch was served, and Balaji smiled. “You know,
losing my job briefly was a wake-up call. I don’t want to live
paycheck-to-paycheck even with a good salary. When I return, emergency corpus
is priority number one.”
“As a personal favour,” laughed Vaidy, “do it before your next
vacation otherwise, our next lunch discussion will be on what went wrong
again!”
Balaji chuckled. “Deal. And this time, I’ll help my buddies
set up theirs too.”