This article appeared in reuters.in – in their personal finance page under my name….
Organise your finances!
The greatest advantage a person has if he calls me is he gets a chance to fill up a 20 page questionnaire. It contains questions from name, gender, marital status, employment, whom he supports, etc. It surely helps the potential customer organize his thoughts.
I ask him questions like “What returns you expect on your investments”. Answers that I have got have been in late teens, and even upwards of 35% p.a.
This helps me to understand the clients psyche and soon tell him that expectation in excesses of 15% over a long period is likely to lead to severe disappointment. For the period 2002 to 2007 I looked like a fool. Thank God I did not change my answer. I still look like a fool (markets are down 40%!!).
One another advantage is I ask them for all kinds of nomination form checking, insurance updating, etc. Of course to get a good return on your investing, you should know how much you are getting on your existing investments. That’s easy.
You can keep your financial house in order is to get organized. Having your financial information stored and processed in a systematic manner will go a long way in helping maintain your finances.
Keep a simple system in place:
Many simple documents you get in the post can all be filed. You can essentially break down all of your financial papers into the following categories:
• Bills due
• Important documents to keep
• Documents that need to be with you for a few weeks
• Items to throw away or shred
Either put all these papers in one file or put it in 4 separate files. You may need to do it only once a fortnight. Keep all bills like electricity, telephone, society dues, insurance premium notice, credit card payment, etc. in one file. My favorite is to make payment (through my credit card) the day I get the bill.
This saves you worries about due date for payment.
If you do a SIP in a mutual fund, the statement comes in once a quarter – you can request for an annual statement if you wish.
If you are tech savvy and make payments on the net, most of these notices can be avoided by asking for an e-statement instead of a physical statement.
Whenever you get the mail or receive another financial document, take a moment to put it into the correct folder. You can then regularly process the folders and permanently store the important documents and toss or recycle what you don’t need. Involve your spouse if he/she is more organized than you.
What about documents that are important and BOTH you and your wife could need access without the other being around (you do not want me to talk about unpleasant things, do you?!!). What could be such documents?
• Income Tax returns
• Insurance policies – medical and life
• Real estate ownership / nomination documents
• Bank, Mutual funds, Brokerage, account opening statements
• Moveable assets ownership papers – car, etc.
Keep these papers in a nice box at home – preferably a strong box – and make sure your spouse knows where the keys are!
Being Organized is an end in itself!
Before you ask me what is the benefit of being organized ask yourself! Your spouse, your chartered accountant, your heirs, will all appreciate your statements being organized in case you are not around or unable to react to questions! Did I forget to add the “Will” as an important document? The fault is entirely mine.
Like all human beings I know that I am immortal
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