Why Financial Planning Required for Doctors, Actors & Artists
Manish Vinod of RM Associates, Ranchi
We have been observing since last so many years that Financial Planning is required for everyone in all respect whether it is health, term or investment in mutual funds or any other Financial Securities.
In India, the segments which ignore proper Financial Planning are doctors, actors, artists.
When we talk about Doctors, due to late start in their career, the huge amount of debt towards Education Loan taken initially pressurize them to pay off once they start their career. Due to their erratic working hours, and strenuous job they don’t have sufficient time to think about their Financial Goals. Investment in the clinic as well as on the education on themselves to upgrade their SKILLS, they need proper Financial Planning. They have busy schedule and few also go on some extra work after working hours, therefore they do sometimes invest without knowing the pros & cons of the product. Most of the Investment is done in BANK FDs, RDs or insurance which is actually not required for them. By and large we can say that without any financial planner, they do not invest in proper asset class since they don’t have time to listen or concentrate on the features of the products. According to me, they should have a proper Financial Planning with a mix of Equity, Debt, Term Insurance and FDs.
As far as the Artist and Actors are concerned, they too should have a proper Financial Planner. They generally have an inconsistent source of Income as sometimes they get a huge amount of money and sometimes, they face the crisis like in recent times. It was a big catastrophe during COVID-19 for these sectors when there was locked down. Uncertainty and volatility of cash flow was very common during these times so to avoid these circumstances they need a very good Financial Planner for best solutions to generate Income by ensuring taxes are covered and enough is saved for the future. This crisis hit many industries especially the Film and TV Industries have suffered. There were many suicides due to financial stress. To avoid this circumstance, would rather request this group to have emergency fund and a good Financial Planner.
How can investing in Equity help Teachers / Defence Personnel?
It has been proven historically that person who invest for a long term in Equity makes money. Teachers and Defence personnel getting a regular salary with annual Increment therefore can invest systematically in equity Markets and follow the rules of Systematic Investment.
How young is early to start investing?
We are aware that early to start investing by adopting a route of SIPs in Mutual Funds makes a huge difference. This is the only way through which we can secure our future.
Firstly, we should know the concept of SIPs and why we are investing. Most of the people are investing in SIPs with some goals either for retirement, child education, Daughter’s Marriage etc.
Systematic Investment Plan is to assist your long-term wealth creation. It works on Rupee Cost Averaging and Power of Compounding. It means when the market is going down you are getting the units at a lower price and once market goes up and the value of your accumulated units increase. The investment should be as per the financial goals and not as per the market fluctuation.
Since the units is purchased at every level, in the long run once the market becomes strong in long term after 15 to 20 years these accumulated units help you grow money. If you have invested based on your goals, remain invested and continue.
Let me tell you that News normally does not make money. It is the economy of the country which guides the SENSEX or NIFTY. I am very much optimistic about the domestic economy. India will provide support to the world economy and hopefully it will become the 5.5 trillion $ economy very soon.
So Let Us Stay Invested !
Views are personal: The author is Manish Vinod of RM Associates, Ranchi
Disclaimer: The views expressed are of the author and are personal. TAML may or may not subscribe to the same. The views expressed in this article / video are in no way trying to predict the markets or to time them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you.
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