I can see the kind of parental pressure that kids are subject to in their lives. Even after a kid turns 20, 25….why even 50 parents think they should run their children’s lives. I know one person who started as a peon and retired as a clerk. He has ZERO understanding of finance. Absolutely zilch.
He has 2 daughters and a son. All his children did Engineering from excellent colleges and mostly on scholarship. The son did his Engineering and went abroad (in the ’80s) but the daughters choose to remain in India. The daughters choose to remain unmarried too. The daughters bought houses for themselves – and the father did move in with one of them, but still has kept his old flat unoccupied.
He continues to ‘manage’ their portfolio. It has fixed deposits, and the usual Lic policies. Every year they put Rs. 70k in ppf, and they have INVESTED in all kinds of LiC products. I have no clue about what kind of returns they have got, but surely they do not have enough money to retire EARLY. As they have not spent any money at all (no vacations, no eating out, no family, great salary in a fantastic MNC) they do have a lot of earned money, BUT portfolio returns are really bad.
Son has escaped the father’s ‘fund management’. However the daughters have suffered….
Kids should tell their parents:
1. Please stay off: Tough to say, almost impossible. However if you do not have enough money in equities or other volatile assets you cannot beat inflation.
2. Managing an income fund, managing a trading equity portfolio, managing an investment equity portfolio, managing a day trading…, real estate – again for gain or rent, commodity portfolio, taxation, …..and over all financial planning is a skill which CANNOT be ever found in ONE person.
3. Target oriented portfolio management is very very essential if you need to retire early.
4. Listening to your parents is fantastic, if they bring COMPETENCE along with the love that they have.
5. A good adviser should have empathy, knowledge, congruence of interest and charge a reasonable fee – and it is axbxcxd – and since it is a product EVEN IF ONE of them is zero, the end product will be ZERO.
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