Personal Finance: May 2025

Chasing Growth, Choosing Peace

Risk Tolerance – A Tale of Two Friends

Rahul and Sameer had been best friends since their school days. From climbing mango trees to playing cricket in the narrow lanes of their neighbourhood, they had shared everything — dreams, doubts, and endless cups of chai during college days.

After graduation, their paths diverged. Rahul chose the steady path of a government job. He cleared the civil services exam and soon settled into a predictable rhythm: fixed salary, pension benefits, and the comfort of job security. Sameer, on the other hand, had always dreamt of building something of his own. He declined a campus placement offer and started a digital marketing firm with a college friend.

Though their careers went in very different directions, their friendship remained strong. Over the years, they often caught up over dinner, sharing stories of life, work, and finances. It was during one such evening that their conversation turned towards investments and wealth building — a topic that revealed just how differently they saw the world.

1. Comfort with Uncertainty
Rahul admitted that he preferred fixed deposits and public provident funds. “I just sleep better knowing my money isn’t going anywhere,” he said. Sameer chuckled, “I get restless if my money isn’t doing something aggressive.” While Rahul found comfort in certainty, Sameer thrived in uncertainty. This difference in temperament highlighted their risk tolerance — not just in finance, but in life choices.

2. Career Choices Reflect Risk Appetite
Their career choices mirrored their financial attitudes. Rahul’s career was structured, secure, and guided by systems. Sameer’s entrepreneurial path was unpredictable, filled with highs and lows. But for Sameer, the possibility of exponential growth outweighed the comfort of a monthly pay cheque. For Rahul, the reverse was true — and both choices were valid.

3. Reaction to Market Volatility
In 2020, when the markets crashed suddenly, Sameer saw it as an opportunity and doubled down on equity investments. Rahul, in contrast, felt uneasy and moved some of his mutual funds into debt instruments. Neither was wrong — they were simply reacting in ways consistent with their individual risk tolerance.

4. Long-Term Goals and Flexibility
Sameer was aiming for early financial independence and was willing to take short-term risks to get there. Rahul was more focused on stability, with retirement in his late 50s and a strong pension plan. Their goals shaped their choices. Knowing their own risk tolerance helped both of them stay the course, without being swayed by trends or peer pressure.

Their story reminds us that risk tolerance isn’t about being bold or cautious — it’s about being authentic to oneself. Financial advisors can offer charts and plans, but ultimately, the decisions must match one’s temperament, life goals, and comfort levels.

To sum up, there are many other factors that influence risk tolerance — age, family responsibilities, income stability, and past experiences, to name a few. But if there’s one lesson in Rahul and Sameer’s journey, it’s this: Understanding your own risk tolerance isn’t a luxury — it’s the foundation of confident, stress-free financial decision-making.

The content made available in this article is for general informational purposes only. While every effort has been made to ensure the accuracy and completeness of the content, it should not be considered as a substitute for professional consultation.

About the Author

Money Magic in Class 4 – A Lesson to Remember

One sunny morning, Class 4 at Balbharati Primary was buzzing with excitement. Miss Anita, their favourite teacher, had a surprise for them.

“Today,” she smiled, “we’re going to talk about something super important—but don’t worry, it’ll be fun!”

The students leaned forward eagerly.

“Tell me,” Miss Anita began, “if I gave you ₹100, what would you do with it?”

Hands shot up. “Buy a toy car!” shouted Aryan. “Chocolates!” giggled Meera. “I’d save it!” said Riya shyly.

Miss Anita nodded. “Good! But what if I told you, you could do all three—if you plan it right?”

The class gasped.

“Let’s start with budgeting,” she continued, drawing three boxes on the board: Spend, Save, and Share.

“Imagine you get ₹100 every month as pocket money. You could spend ₹50 on fun things, save ₹40 for something big like a cricket bat, and maybe share ₹10 to buy a birthday gift for your friend.”

She handed out colourful budget sheets and crayons. “Now you try!”

The children excitedly began drawing how they would divide their money. Some even added little drawings of snacks, books, and piggy banks.

After a few minutes, Miss Anita clapped her hands. “Great work! Now, let’s talk about saving.”

She pulled out a glass jar with a sticker on it that read "My Dream Trip".

“This is my savings jar,” she said. “Every week, I drop in a little money to save up for a holiday.”

“Cool!” said Rohan. “Can I make one too?”

“Of course! And here’s the fun part. If you reach your goal, I’ll add a small bonus—just like banks give interest.”

The class cheered.

“Now, here’s a tricky one,” she said, drawing two columns: Needs and Wants.

“Is chocolate a need or a want?” she asked.

“Want!” came the chorus.

“And school shoes?”

“Need!”

Miss Anita smiled. “Exactly. Learning to tell the difference helps us spend wisely. Let’s play a game. I’ll show you pictures, and you put them in the right box.”

The room filled with laughter and some debate (“But ma’am, a video game is totally a need!”).

Finally, she whispered, “Let me tell you a secret… Do you know what investing is?”

Blank stares.

“Imagine planting a mango seed,” she said, holding one up. “You water it, give it sunlight, and wait. One day, it grows into a tree with lots of mangoes. Investing money is just like that. You plant it today, and one day, it grows!”

She handed out small paper trees. “This is your ‘Money Tree’. Every month you save or invest, colour one leaf green. Let’s see how green your tree can get!”

As the bell rang, the kids didn’t want to leave.

“Miss, can we do more money magic tomorrow?” Aryan asked.

“Of course,” she smiled. “We’ve only learned four concepts today—budgeting, saving, needs vs. wants, and investing. There are many more!”

And just like that, a simple classroom turned into a magical world of financial wisdom—one coin, one choice at a time.

About the Author

A Chat Across Generations: Introduction to Synthetic Financial Products

“Dadu, I’ve been reading up on something called synthetic financial products. Sounds futuristic, right?” Rohan asked excitedly, scrolling through his investment app.

His grandfather, Mr. Mehta, looked up from his morning newspaper, amused. “Synthetic? Are they growing investments in a lab now?”

Rohan laughed. “Not quite. But they’re definitely engineered. They’re complex financial instruments that mimic the behavior of real assets without actually owning them.”

Mr. Mehta raised an eyebrow. “Hmm. In my days, we believed in tangible things. Stocks, bonds, fixed deposits—things you could understand and trust.”

“I get that,” Rohan replied, “but synthetic products are designed for strategic goals—hedging, speculation, or gaining exposure to assets that might be hard to buy directly.”

Seeing the curiosity in his grandson’s eyes, Mr. Mehta gestured for him to continue.

“Take synthetic CDOs, for instance,” Rohan explained. “They’re like bundles of debt—say home loans—that are repackaged and sold to investors. But you don’t actually own the loans. You’re just betting on whether the people who took those loans will pay them back.”

“Betting?” Mr. Mehta repeated with concern. “Sounds more like gambling than investing.”

“That’s the risky side, true. But when used wisely, they help institutions spread and manage risk,” Rohan said. “And they use something called derivatives—contracts that derive their value from an underlying asset.”

Mr. Mehta nodded slowly. “I’ve heard of derivatives. Options and swaps, right?”

“Exactly!” Rohan smiled. “Take options. You don’t own the stock, but you have the right to buy or sell it at a set price. Combine a few of these, and you’ve created a synthetic exposure to the stock. It’s like controlling the car without owning it.”

“And swaps?” Mr. Mehta asked, now intrigued.

“Swaps are exchanges of cash flows. Say, I have a loan with a fixed rate and you have one with a floating rate. We could swap our interest payments. This is used in synthetic products to manage risk or costs.”

Mr. Mehta leaned back. “Interesting. But all this sounds complicated—and risky.”

“It is,” Rohan admitted. “Synthetic products often involve leverage, meaning borrowed money. So gains can be big, but losses too. That’s why regulators are keeping a close watch on these instruments.”

“Like during the 2008 crisis?” Mr. Mehta asked.

“Exactly. Many of those synthetic products failed when the real assets under them—like bad mortgages—started defaulting. That’s why understanding the underlying risk is crucial.”

Mr. Mehta smiled. “So you youngsters aren’t just chasing flashy investments. You’re learning the mechanics too.”

Rohan grinned. “Trying to. There’s a lot more—like credit default swaps and synthetic ETFs—but let’s save those for tomorrow’s chai.”

Mr. Mehta chuckled. “Deal. But remember, in any generation, sound investing comes from knowing what you’re getting into.”

To sum up, synthetic financial products are fascinating tools that offer investors new ways to access markets and manage risk. As Rohan and his grandfather discussed, understanding a few core components—like synthetic CDOs, derivatives, options, and swaps—can open doors to more sophisticated strategies. But like any powerful tool, they come with risks and require a strong foundation before jumping in.

About the Author

Behind Every Purchase: The Untold Story of Spending

On a quiet Sunday morning in a small town known more for its dosa stalls than designer stores, Ravi stood at the edge of the local electronics showroom. He wasn’t planning to buy a new phone, but somehow, he’d ended up here—scrolling through glossy models and comparing specs he barely understood. Last week, his cousin posted a photo with the latest model. That little picture had triggered something he couldn’t quite explain.

Ravi grew up in a modest home. His father was a schoolteacher, and his mother ran a home-based tailoring service. Money was tight, but never absent. He remembered how carefully his mother would wrap the school fee money in newspaper and tuck it inside her steel almirah. “We don’t spend to show others,” she often said. But now, standing under the showroom’s LED lights, Ravi wondered if that wisdom still held true.

What Ravi didn’t realize was that childhood experiences silently shape our financial personalities. Those who grow up watching financial stability may treat money with confidence, while others—exposed to uncertainty—might either cling to every rupee or spend impulsively, trying to escape memories of ‘not having enough.’

The moment Ravi finally picked up the phone he wasn’t going to buy, his heart beat faster. A small voice whispered, “Just swipe the card, you deserve it.” That’s the lure of instant gratification—the psychological pull to feel good now, even if it means sacrificing future savings. The new phone promised validation, if only briefly.

Add to that the ever-present world of social media. Even in smaller towns, platforms have blurred class boundaries. You see a neighbor flaunting a vacation or a colleague with a smartwatch, and suddenly, you're spending not for yourself, but to match an invisible scoreboard. This is social comparison in action—one of the most underestimated forces driving spending in today’s connected age.

Ironically, Ravi hadn’t come here on his own. A targeted ad had popped up on his screen three days ago, showing the very model he was now holding. This wasn’t chance—it was the result of smart algorithms and advertising psychology, trained to detect desires before we do. Knowing this, however, can be liberating. Awareness brings power.

Before completing the payment, Ravi paused. He remembered how stressed he’d been about his EMIs just last month. That’s when financial stress often leads to emotional spending—as a form of relief, a way to feel ‘in control’ amidst the chaos.

He took a deep breath. “Maybe not today,” he told the salesman and walked out, surprisingly lighter without the phone in his pocket.

Money decisions aren’t always logical. They’re woven with memory, emotion, identity, and even peer pressure. But when we understand the forces at play, we stand a better chance at making choices we won’t regret.

About the Author

When Life Happens, Be Liquid

The Power of Cash: Aruna’s Money Mantra

Aruna Iyer, 45, was a seasoned professional working with a private bank in Mumbai. With nearly two decades in the financial sector, she’d advised countless clients on saving, investing, and planning for the future. But like many others, she had personally overlooked one crucial aspect of personal finance — liquidity.

For years, Aruna had followed a disciplined investment routine. Her money was parked in fixed deposits, mutual funds, PPFs, and even a second property in Navi Mumbai. Her portfolio looked excellent on paper — until reality struck.

In early 2022, her mother was diagnosed with a heart condition that required immediate surgery. The total estimated cost: ₹8 lakhs. While Aruna had health insurance, the claim process was slow, and upfront deposits were needed quickly. Scrambling for funds, she realised the hard truth — most of her investments were either locked in or illiquid.

“I have money,” she told her friend on the phone, “but I can’t access it in time.”

It was a wake-up call. She ended up paying penalties to break an FD, selling mutual funds in a down market and borrowing from her emergency credit card, - losing both peace of mind and money.

After the dust settled, Aruna re-evaluated her financial strategy. She realised liquidity wasn't just a concept in banking reports — it was a lifeline.

Here’s what Aruna learned — and what every Indian household should remember:

1. Liquidity Meets Emergencies

Life doesn’t come with a warning. Whether it's a health crisis, job loss, or family emergency, liquid assets — money you can access within 24-48 hours — are crucial. Aruna began maintaining a separate emergency fund in a sweep-in savings account linked to an FD, combining accessibility with reasonable returns.

2. Opportunities Knock Unexpectedly

A few months later, Aruna found an attractive IPO she wanted to invest in. This time, she had funds in a liquid mutual fund, easily redeemable within a day. She seized the opportunity and made a tidy return. Had she waited for money to become available, the window might have closed.

3. Peace of Mind is Priceless

Being liquid meant Aruna could sleep better. Financial stress often stems not from lack of wealth, but from lack of access. Knowing she had funds she could rely on, without needing to liquidate long-term goals, gave her confidence and calm.

4. Flexibility in Life Decisions

Liquidity also gave Aruna the courage to take a short sabbatical six months later, when her daughter was preparing for board exams. Without worrying about EMIs or monthly expenses, she focused on family without compromising her future.

To sum up, we often chase returns, accumulate assets, and diversify our portfolios. But as Aruna’s story shows, true financial strength lies not just in how much you have, but how quickly you can use it when it matters most.

About the Author

What if Rajesh didn't wake up tomorrow morning?

A Story Every Indian Family Should Hear - Estate Planning Basics

Meet Rajesh Mehta, a 48-year-old self-employed interior designer from Pune. With a thriving practice, a supportive wife, and two teenage children, life for Rajesh seems sorted. He owns a modest flat, a studio space, some mutual fund investments, and a small ancestral land parcel in Nashik. But a casual conversation with his CA, who was also his financial advisor, at a Sunday brunch sparked a thought he hadn’t considered seriously — What happens if something happens to me?

That’s when Rajesh began exploring Estate Planning — not just about wealth, but about responsibility.

1. The Will – Your Voice Beyond Life

Rajesh started with a Will. A Will is a legal declaration of how one’s assets should be distributed after death. It's the cornerstone of estate planning. For Rajesh, it meant clarity — who inherits the studio, who takes care of the ancestral land, how his bank accounts and investments are divided.

In India, personal laws play a key role in inheritance. For example, Hindu Succession Act governs Hindus, while Muslims follow Shariat law. Rajesh, being Hindu, realised that without a Will, his property would be divided among legal heirs per succession laws — possibly contrary to his wishes.

Drafting a Will gave him peace — and ensured his voice would be heard even in absence.

2. Guardianship Letter – For Their Tomorrows

Rajesh’s next concern was his children. His wife is a homemaker, and he wondered, If both of us were gone, who would take care of my minor children? That’s where a Letter of Guardianship came in — a document naming someone he trusts to raise his children.

Rajesh wrote a simple signed letter, explaining why he chose his cousin as guardian — someone with similar values and a deep bond with the children.

3. Power of Attorney – When You Need a Helping Hand

Last year, Rajesh underwent a minor surgery, during which he realised how helpless one can feel even temporarily. That led him to execute a Power of Attorney (PoA) in favour of his wife — empowering her to handle bank transactions and property matters in his absence.

There are two main types: General PoA, which is broad, and Specific PoA, limited to particular acts. Rajesh chose a general PoA, with safeguards built in.

4. Trusts – Structured Legacy Planning

His CA friend also informed Rajesh about creating a Trust — not immediately, but in the future. Trusts are useful when you want controlled disbursement of assets, say for a child with special needs or to protect business assets from family disputes. In Rajesh’s case, if he expanded his business further, a private family trust might help separate personal and professional wealth effectively.

5. Taxes – Don’t Let the Government Take a Bigger Slice

Lastly, Rajesh reviewed the tax implications. India does not have an estate tax currently, but capital gains, clubbing provisions, and GST on certain transfers (like property to a trust) could still apply. Coordinating with his CA helped align his estate plan with smart tax strategies.

To sum up, Rajesh’s story is not unique — but his proactive approach is. Estate planning is not just for the wealthy or elderly — it’s for anyone who loves their family and wants to reduce future chaos. A little effort today can secure your family’s tomorrow.

Start like Rajesh did — with a simple question: If I’m not around, will my family know what to do?

About the Author

The 2 AM Money Machine

The 2 AM Money Machine

Building Your Life Around Passive Income

It was 2 AM when Karan’s phone buzzed. Half-asleep in his high-rise apartment overlooking the city skyline, he reached for it, thinking it was a work email. Instead, it was a notification from his investment app—his mutual fund dividends had just been credited. He smiled, turned over, and went back to sleep. No client calls, no deadlines, no deliverables—just money quietly flowing in. That’s the silent charm of passive income.

In a world where most people are trading time for money, passive income offers a refreshing alternative: making money work for you instead of the other way around. It's not magic, nor is it overnight success. It's a strategy—a deliberate, well-planned approach to financial freedom. Here’s how to start building your own 2 AM money machine:

1. Understand What Passive Income Really Means

Passive income is often confused with easy money. It’s not. It requires upfront effort, capital, or both. The key difference is sustainability—once set up, these income streams require minimal maintenance. Think of rental income, dividends, royalties, or automated digital businesses. The returns continue even when you're not actively involved.

2. Start with What You Know (and Have)

Instead of jumping into the latest trending passive income scheme, start with familiar ground. Have a second flat? Consider leasing it long-term or as a serviced apartment. Comfortable with equity markets? Systematic investments in dividend-paying stocks or mutual funds can build a stable stream over time. Use your existing skills, assets, or even spare time to lay the groundwork.

3. Automation is Your Best Friend

Passive income is strongest when it’s predictable. Automate your SIPs, set up auto-debits for REITs, or configure affiliate links to run across your content platforms. Let technology do the heavy lifting so you can focus on scaling or diversifying, not micromanaging every detail.

4. Digital Assets: The Scalable Gamechanger

Unlike physical assets, digital products (like e-books, courses, or even stock photos) can be created once and sold indefinitely. The internet offers near-zero distribution costs and global reach. Whether it’s a weekend writing a guide or recording tutorials, a little creativity can open doors to long-term digital royalties.

5. Reinvest to Multiply

Don’t just spend your passive income—reinvest it. Whether it's increasing your corpus in income-generating assets or building new streams altogether, compounding is the secret engine behind wealth creation. The goal isn’t just extra income; it’s eventually replacing your active income altogether.

To sum up, passive income isn’t a shortcut—it’s a shift in mindset. It’s about designing a life where money doesn’t control your time. As Karan turned back to sleep that night, it wasn’t just about the money—it was the freedom to dream, uninterrupted.

About the Author

Bhavesh and the Hidden Gems

Bhavesh and the Hidden Gems

Bhavesh was always fascinated by the stock market. While his friends were content investing in well-known giants — the blue chips that everyone talked about — Bhavesh had his sights set on something different: the lesser-known, underappreciated small-cap stocks.

One evening, during a family get-together, Bhavesh’s uncle, an old-school investor, asked, “Why don’t you stick with companies that have been around for decades? They’re safe. Tried and tested.”

Bhavesh smiled. “Because sometimes, the sapling grows into the biggest tree — if you water it at the right time.”

He wasn’t wrong. Small-cap stocks — shares of relatively smaller companies — had the potential to deliver exponential returns. These were the businesses still in the early stages, often led by passionate founders and driven teams. But as Bhavesh would soon learn, the road to riches was anything but smooth.

The Wild Ride Begins

Bhavesh’s first small-cap pick looked promising — a niche chemicals company supplying to fast-growing industries. The stock doubled in a year. Encouraged, he added two more similar names. But within months, volatility struck.

One of the companies missed its quarterly earnings. Another faced a factory shutdown due to environmental issues. Share prices nosedived. Bhavesh watched as his portfolio swung wildly — sometimes gaining 15% in a week, only to lose it all the next.

He realized small caps were like a stormy sea — full of hidden treasures, but also prone to sudden tempests. Their limited size made them more vulnerable to economic shifts, regulatory changes, and internal missteps.

The Liquidity Trap

One morning, Bhavesh decided to sell one of his holdings after reading a negative article. But the stock barely had any buyers. For three days, his sell order stayed pending. When it finally went through, the price had slipped 8%.

Small-cap stocks, he learned, often don’t have enough daily trading volume. This “illiquidity” made entering or exiting positions a challenge — especially during volatile phases.

The Fog of Limited Information

Unlike large companies that were frequently in the news and followed by analysts, many of Bhavesh’s small-cap picks had little coverage. Finding reliable data was hard. Management commentary was scarce. Rumors spread faster than facts.

It took Bhavesh time to understand that investing in small caps required more than charts and headlines. It needed patience, deep research, and often, reading between the lines.

The Payoff — and the Lesson

Ten years later, Bhavesh looked at his portfolio. Not all bets had paid off. But two of his early picks had turned into multibaggers — companies that scaled up, improved governance, and captured new markets. The gains from those two had more than offset his losses.

He now told his friends, “Small caps are like start-up stories in the public market. You need conviction, time, and the ability to ignore short-term noise.”

To sum up, Bhavesh’s journey wasn’t easy, but it was rewarding. For those willing to do the homework and stay invested, small caps offer a chance to discover tomorrow’s leaders today. Just remember — hidden gems are found deep underground, not lying on the surface.

About the Author

Financial Backup Plan - Final Part

What Yogesh Taught Sudhir

A Step-by-Step Financial Backup Plan

When Sudhir met Yogesh, he wasn’t just looking for advice—he was looking for relief.

After an unexpected medical emergency involving his mother, Sudhir had found himself financially stretched and emotionally drained. It wasn’t a lack of income—Sudhir earned well. It was a lack of preparation. That’s when his friend Ria gently insisted, “Talk to Yogesh. Trust me, you’ll thank me later.”

What followed was a transformation—not overnight, not dramatic, but methodical. Yogesh didn’t just fix Sudhir’s finances; he helped Sudhir understand them.

Here’s the practical backup plan Yogesh designed—one that could serve anyone feeling financially unprotected.

1. Know Your Starting Point

Yogesh asked Sudhir to lay it all out: monthly income, expenses, debt, and savings. Not estimates—actual numbers. It was uncomfortable at first, but essential. Only with clarity can you craft a realistic plan.

Tip: Use a simple spreadsheet or a budgeting app. Knowing what you really spend is often an eye-opener.

2. Build the Emergency Fund First

Yogesh called this “Sudhir’s seatbelt.” Three to six months of essential expenses—rent, bills, groceries, insurance—set aside in a separate savings account. It wasn’t for investing. It was for surviving the unexpected without spiraling into debt.

Tip: Automate a fixed amount every month. Even ₹2,000 monthly compounds into strength over time.

3. Protect Before You Grow

Before Sudhir could dream of investments, Yogesh insisted on protection.

Health Insurance: A proper cover for both Sudhir and his parents.

Term Life Insurance: Pure protection—no returns, just peace of mind.

Basic Will & Nomination: Just in case. Because life doesn’t always warn you.

Tip: Don’t skip insurance for parents. It's not just financial—it’s emotional security.

4. Define Short & Long-Term Goals

Sudhir’s goals became clearer once his foundation was secure.

Short-term: Repay credit card debt, build a travel fund.

Long-term: Buy a house, start his own venture, retire at 50.

Yogesh helped assign timelines and amounts to each, so they became actionable, not abstract.

5. Start Investing—Smartly

With goals mapped, Yogesh introduced Sudhir to Systematic Investment Plans (SIPs) in mutual funds—moderate risk, diversified, and aligned with his risk profile.

They didn’t chase high returns. They chased consistency.

Tip: Invest with a purpose, not peer pressure. Sudhir’s SIPs had names—“Home Down Payment,” “Retirement Fund”—not just numbers.

6. Review and Adjust

Every quarter, Sudhir and Yogesh would sit down (or Zoom in) and go over the plan.

Did expenses change? Did Sudhir get a bonus? Was a goal approaching?

Tip: Financial planning isn’t “set and forget.” It’s “set, track, and tweak.”

7. The Unexpected No Longer Felt Unmanageable

A year later, Sudhir wasn’t rich—but he was ready. And that, as Yogesh always said, is the real definition of wealth.

Emergencies still came, but now they didn’t feel like avalanches. They were just… handled. If you’re like Sudhir before Yogesh—living well but unprotected—this plan isn’t optional. It’s urgent.

You don’t need to be a finance nerd. You just need someone to show you how.

Sudhir had Yogesh.

Maybe you need your own.

About the Author

Financial Backup Plan - Part 2

Inside the Mind of a Financial Planner

Yogesh’s Side of the Story

When you’ve worked with enough clients, you learn to recognize the signs: nervous energy, a smile masking panic, and that telltale question: “Am I too late?”

That was Sudhir.

We met at a quiet café, courtesy of a referral from his friend Ria. Sudhir looked sharp—confident, articulate—but there was a weight behind his eyes that didn’t match his breezy exterior. Within minutes, it was clear: the storm hadn’t just shaken his finances, it had shaken him.

His mother’s unexpected surgery had wiped out his savings, forced him into debt, and left him questioning everything. “I thought I was doing okay,” he said. “But now I realize—I wasn’t even close.”

I didn’t offer a product. I offered him clarity.

We began where every financial rescue mission should begin: with truth. We listed every inflow, every leak in his wallet—streaming subscriptions, impulse purchases, forgotten EMIs. I laid it out on paper, not to intimidate him, but to illuminate what he’d been avoiding.

Then we rebuilt.

Step one was the most unglamorous: an emergency fund. No one gets excited about parking money in a savings account, but Sudhir understood now—this was the line between calm and chaos.

Step two: protection. I recommended health insurance for his parents and a term life policy for him. When he asked about returns, I smiled and said, “Peace of mind is the return.”

Once the basics were in place, we shifted to strategy. Sudhir had goals—some vague, some concrete. I helped translate them into numbers and timelines. Buying a home? Not impossible. Retiring early? Plausible, with discipline. Entrepreneurship? Not a dream, but a goal—once backed by a corpus.

He was eager to invest but burned by inexperience. I didn’t flood him with jargon or push risky bets. We started simple—SIPs in diversified mutual funds, aligned with his risk appetite. I educated, not sold.

What impressed me was his consistency. Every month, he stuck to the plan. And with every quarter, his confidence grew—not just in markets, but in himself. He’d call and say, “I resisted buying the new iPhone. Put that into my corpus instead.” That’s when I knew he had turned a corner.

There’s a quiet joy in this work—not in commissions or AUM growth, but in watching someone reclaim control. Sudhir, like so many young professionals, had income, ambition, and energy—but no structure.

He just needed a nudge, a blueprint, and someone to say, “You’ve got this—but here’s how.”

We still catch up regularly. His goals have evolved, his net worth has grown, and his sense of calm? Unmistakable.

You see, financial planning isn’t about wealth. It’s about resilience—the power to face life, not fear it.

And sometimes, all it takes is one rainy day—and one honest conversation—to set someone on a new path.

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Financial Backup Plan - Part 1

The Rainy Day That Changed Sudhir's Life ….

And How Someone Helped Him Navigate It

Sudhir was 26, brimming with confidence in his first job. With a solid paycheck, a sleek studio apartment, and weekend getaways dotting his calendar, life felt sorted. Financial planning? That was a worry for older people, he thought. Right now, life was to be lived.

Then came the monsoon—and with it, a storm he hadn’t anticipated.

His mother slipped on wet tiles at home and suffered a serious hip fracture. The surgery, hospital bills, medicines, and post-care rehabilitation came to several lakhs. Sudhir, despite earning well, had no insurance for his parents and no emergency fund. He scrambled—breaking his tiny mutual fund, borrowing from friends, and maxing out his credit card.

Two weeks later, sitting in the hospital waiting room, sleep-deprived and anxious, he finally admitted to himself: he had no idea what he was doing with money.

A few days later, a college friend, Ria, dropped by. Over coffee, Sudhir vented about the financial chaos. Ria nodded quietly and said, “You need to meet my friend, Yogesh—he’s a financial planner who changed the way I think about money. You’ll like him.”

Skeptical but desperate, Sudhir agreed.

When they met, Yogesh wasn’t the suited-booted sales guy Sudhir feared. Instead, he was calm, precise, and asked questions Sudhir had never considered: “What’s your monthly cash flow? Do you know your net worth? What does ‘financial security’ mean to you?”

Yogesh took Sudhir through a detailed financial health check—income, expenses, debt, future obligations. It was the first time Sudhir saw his entire financial life on one page—and it wasn’t pretty. But Yogesh didn’t judge; he planned.

They set up a basic structure. First, an emergency fund: six months of essential expenses in a high-yield savings account. Next, insurance—health coverage for his parents, a term plan for Sudhir himself.

Debt came next. Together, they worked out a repayment plan for the credit card, followed by an automatic savings system—SIPs tailored to Sudhir’s risk appetite. Yogesh didn't push fancy products. Instead, he explained them, letting Sudhir decide. For the first time, investing didn’t feel like gambling; it felt like building.

They even mapped out long-term goals—buying a home, maybe starting something of his own someday. With Yogesh’s guidance, each goal had a number, a timeline, and a plan.

Three years later, Sudhir still works with Yogesh. His finances aren’t flashy, but they’re solid. When the pandemic brought salary cuts, he didn’t panic—his backup fund was ready. He now speaks about IRR, asset allocation, and compounding like he once did about cricket scores.

That rainy day changed his life. But it wasn’t the fall that defined it—it was the recovery, made possible with the right help.

Sudhir often tells friends, “You don’t need to be a finance genius. You just need a guide, early enough.”

And every time he gets his investment report, he silently thanks Ria—and Yogesh—for showing him that strength doesn’t come from income alone, but from preparation.

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How to Plan a Worry free Retirement

Meet Mr. Joshi, a 56-year-old employee who has always been prudent about money. With no pension benefits available to him, Mr. Joshi began thinking about his retirement years early in life. His wife, a homemaker, and his two well-settled children have always been his pillars of support. Now, with his responsibilities mostly fulfilled, he wants to ensure his post-retirement years are financially secure and worry-free.

Mr. Joshi had the foresight to start planning early. In his late 30s, he began setting aside part of his income into fixed deposits and recurring deposits—stable, low-risk options that suited his risk appetite at the time. While these instruments offered safety, they weren’t enough to beat inflation in the long run.

Enter his niece, Priya, a Personal Finance Professional, who gradually helped him rethink his strategy. Over time, she guided him to diversify his investments into mutual funds, starting with hybrid funds and then equity-oriented schemes. Thanks to Priya's steady hand, Mr. Joshi built an investment portfolio tailored to long-term wealth creation, risk management, and liquidity.

Let’s walk through how his proactive planning and balanced investment strategy helped lay the foundation for a stress-free retirement.

1. Determining Retirement Objectives

Mr. Joshi always envisioned a retirement where he could maintain his current lifestyle, travel occasionally, and be financially independent without burdening his children. He also wanted to be prepared for medical expenses and unexpected needs.

2. Estimating Post-Retirement Expenses

One of the most critical steps in retirement planning is forecasting future expenses. Mr. Joshi currently spends around ₹60,000 per month. At a 6% inflation rate, this figure could easily touch ₹1 lakh monthly and gradually increasing much beyond that six digit figure over the years.

By having a detailed budget in mind he was able to assess how much retirement corpus would be needed to sustain him and his wife for at least 25–30 years post-retirement.

3. Achieving Financial Independence

With a clear picture of his goals and future expenses, Mr. Joshi focused on building financial independence. Early investments in bank deposits laid the foundation. But the real growth came from his disciplined SIPs in hybrid and equity mutual funds, initiated in his early 40s with guidance from his niece.

For example, his ₹25,000 monthly SIPs in equity funds over the past 15 years have grown into a sizeable corpus, supplementing his PPF and provident fund accumulations. Today, he’s on track to retire with a diversified portfolio that offers both growth and income stability.

4. Minimizing Taxes

Efficient tax planning has helped Mr. Joshi keep more of his returns. He’s focused on tax-saving avenues under Section 80C during his working years and plans to rely on instruments like Senior Citizens' Savings Scheme (SCSS) and Systematic Withdrawal Plans from his hybrid funds for post-retirement cash flow.

To sum up, Mr. Joshi’s story is proof that retirement planning doesn’t have to be stressful—especially when started early and done with discipline. By setting clear goals, investing smartly under good advice, and thinking long term, he has created the freedom to enjoy life on his own terms.

About the Author

Invest Wisely, Sleep Soundly

Aditi closed her shop shutters at 8:30 PM, as she did every evening. The small tailoring boutique she ran had been her pride for over a decade. Nestled in a bustling neighborhood of a mid-sized town, her store served generations of families—from school uniforms to bridal lehengas.

That evening, as she counted the day's earnings, her thoughts drifted to something her cousin had said over a video call: “Bhabhi, you should invest more real estate - that is the way to grow your wealth fast!”

Aditi smiled faintly. She had heard this before. But whenever she considered moving her money around, one question always came to her mind:

"Will this help me sleep peacefully at night?"

Over the years, Aditi had built her own way of handling money. She owned a small house (no home loan), the shop where she runs her boutique, held fixed deposits that provided her with stability, and had a modest collection of gold—partly for tradition, partly for security. She recently started a Systematic Investment Plan (SIP) in an equity mutual fund, cautiously but confidently.

But her calm confidence had been hard-earned.

In her late 30s, encouraged by friends, she invested in a piece of land on the outskirts of town, thinking it would double in value within a few years. It didn’t. Legal issues, delayed approvals, and a dishonest agent made it a stressful, expensive mistake. For nearly three years, she was tied up in paperwork and sleepless over uncertainty.

That experience taught her a lasting lesson: any investment that brings more worry than comfort isn't worth it—no matter how lucrative it sounds on paper.

Aditi’s story brings home a powerful truth about personal finance - understanding your risk tolerance is as important as understanding the product. For her, the security of fixed income, the predictability of gold, and the measured risk of mutual funds suited her temperament. She didn’t chase the highest returns. She chased peace of mind.

She had friends who made profits flipping property or trading stocks. And while she admired their success, she never felt the urge to follow. Her financial philosophy was simple : Spend wisely, Keep debt low, Save consistently, Invest in what you understand.

Each person, like Aditi, has their own comfort threshold. Some can handle volatility. Others prefer the calm of slow, steady growth. Neither approach is better—what matters is whether your choices let you rest easy at night.

Disclaimer: This article provides general information and should not be considered financial advice. Consult with a qualified financial professional for personalized guidance.

To sum up, “Will this help me sleep peacefully at night?" test is a powerful tool for making financial decisions that align with our values and priorities. By prioritizing peace of mind and emotional well-being, we can create a more fulfilling and sustainable financial future.

About the Author