Conversation at Bharadhwaj Investsmart
The meeting room at Bharadhwaj Investsmart had a calm,
reassuring ambience, exactly the kind
that helped people talk about money without hesitation. Mr. Varmaji, 66
years old, retired but continuing as a consultant, sat across from CA Srini
with a mix of pride and quiet worry in his expression.
They exchanged warm greetings, reminisced briefly about old
colleagues, and laughed about the changing corporate world. Gradually, the mood
shifted to the purpose of the meeting.
“Sriniji… I thought retirement would be smoother,” Varmaji
began, his voice steady but low. “I’ve worked hard, earned well, raised my
children, given them good education. They’re both settled, thankfully not
depending on me now.”
Srini nodded, encouraging him to continue.
After a moment of silence, Varmaji opened up. “As for my
finances… I’ve not been able to build a significant corpus. Only about fifty
lakhs in liquid form. I know it’s not great, but that’s how things turned out.”
He paused, then added, “But I am invested heavily in real estate - the native
house, my Mumbai apartment, the ancestral place with my brother where I hold
50%, and another ancestral house in my wife’s name.”
Srini listened without interrupting, making notes slowly and
respectfully. Once Varmaji finished, Srini leaned forward, gentle yet firm.
“Sir, thank you for sharing everything so transparently.
You’ve fulfilled every family responsibility beautifully. But I must speak to
you honestly… A liquid corpus of ₹50 lakhs will not be adequate for the next
20 - 25 years of retired life.”
Varmaji absorbed the words without resistance, almost as
though he expected to hear them.
“You’re ‘asset rich’ but not ‘cash flow rich’,” Srini
continued. “Most of your wealth is tied up in property, which does not support
your monthly needs. Emotionally valuable, yes. Financially useful in
retirement, not really.”
He opened an Excel sheet. “Look here. The rental yield from
these properties is barely 2 / 2.5% after tax and maintenance. But if even part
of the real estate say half your share of the ancestral property is liquidated
and invested in a hybrid fund, it can generate 6.5 / 7% annually and continue to
grow.”
The numbers spoke louder than the words. Varmaji looked
thoughtful rather than defensive. “I’ve always been sentimental about property…
but sentiment doesn’t pay medical bills, I guess.”
A few minutes later, CFP Vaidy joined the meeting,
unaware of the discussion that had already taken place. After quickly reviewing
the asset sheet, he smiled knowingly.
“Sir, you have excellent real estate. But unless you convert
some of it into financial assets, your retirement income will remain tight.”
Varmaji laughed lightly. “So, both of you are saying the same
thing.”
Vaidy replied, “That means it’s time to take action, not
stress.”
As he left, Varmaji shook both their hands warmly. “A sincere thank you to you both.
I came here for advice, but I’m walking out with clarity.”
Yes sir this is very true, as a fellow financial advisor, we have seen several pensioners and elderly people who are holding multiple properties apparently for their children, and facing cash flow crunch in their retired period.
ReplyDeleteAs a person in his mid 40s, I have been fascinated by real estate - apartments, small shops, commercial offices for investing. This article is now making me think seriously..
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