Ps: this article is about 5 years old, and they still are floundering. The names have of course been changed, and the airline hidden, but you can guess. Imagine a couple working in Kingfisher! No clue who is paying their EMIs!!

now read on…



I was aghast when Capt. Ajoy Athalye walked into my office with his wife Sunita announcing that he wants to buy a Rs. 50 lakh commercial space in a suburb of Delhi.

Aghast because he had come to me a week earlier to share his portfolio and seek remedies to that. He and Sunita were employees of a floundering airline. He was a pilot who earned quite well – Rs. 36 lakhs a year. His wife had a well paying ground job in the cargo section and she was earning about Rs. 12 lakhs a year. At the age of 52 years for a couple like this one hopes to see at least a couple of crores in assets apart from the house in which they live.

I was shocked to see the Athalyes had about Rs. 4 lakhs in mutual funds and about 2 lakhs in public provident fund, national savings certificates, etc. Of course he had Rs. 17 lakhs in provident fund and his wife too had about Rs. 12 lakhs in her provident fund account.

If this was the case where did the money go?

Well it went to fund the education of his children. He had spent Rs. 24 lakhs on making his son an MBA (from Australia) – this is after he graduated with honors. His daughter wanted to become a Commercial Pilot and that set him back by Rs. 35 lakhs. His flat had cost him about Rs. 20 lakhs and now had a market price of Rs. 1 crore. He wanted to know whether he could retire in 8 years time and Sunita retire in 12 years time.

Their monthly expense was Rs. 1 lakh a month. This included both the children (the son could not find a job of his liking in this slow down so he was contemplating studying further in India) and his daughter was doing a Computer course with NIIT (commercial pilot jobs were not available at all, that is all). Of course they had  2 maids, one cook and one driver. They were really revenue rich. What they did not realise was that they were balance sheet paupers!

Now the great captain wanted to buy a commercial space in a new place and was wondering how to fund it.

Some people do not ever fail to stun me. Athalyes are surely one among them. I asked him if he had seen Baghban – the movie starring Amitabh Bachhan, Hema Malini, Salman Khan, Paresh Rawal. There was a lot of similarity, they had one parrot, 2 dogs, and a fish tank.

Like a doctor I told them the following:

Watch television, you may actually have lost your job.
Your children are your pride, glory and joy. However they have cost you more than anything else in life, so they better start repaying and repaying fast.
You have no life insurance, and your accumulated money will last exactly 24 months from the date of separation from the company.
Be prepared to die at age 62 if you retire at 60 years, and at 54 if you are fired today.

Of course he did not like one bit of what I said. He countered by saying he could borrow against his existing house (Loan Against Property) and fund the new commercial property. He would then give the commercial property for rent –and the rent would be able to pay the EMI.

And in a worst case if he lost his job he could always get a Reverse Mortgage.

I was appalled. Luckily excel came to my rescue – the EMI on the LAP was about Rs. 100,000 per month for 8 years. The rent he could get was Rs. 14,000 for the property. There was a slight mis-match.

He did not realize that reverse mortgage was available only after the age of 62 years, so he was about 10 years away from that. Moreover his flat would be about 26 years by the time he was 62. This meant his flat would not be eligible for reverse mortgage.

Last I heard of, they were looking for a new Advisor. After all, who wants to hear the truth?

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  1. If the truth is as blunt as that, one would try and bury one’s head in the sand and remain blinded.

  2. Hey! I’m taking this article to my client!! Sometimes an independent and objective observation makes people think!!

  3. Sir, You were stating the problems but it would be great to write what he should have done or what he should at this time.(though generally you were writing about many investment strengths and pitfals) It will help people like me who are in the same situation.
    If I need to contact separately, I want to do so.

  4. I think financial decisions are mixed with emotions rather than rationality. Everything after that is downhill.

  5. When I read some of these real life personal finance horror stories, I just consider myself very lucky and blessed. Very lucky to study well and earn a salary which is good by most standards and blessed because my parents instilled the good sense to put that salary to good use.

    In the end it comes down to decisions made in life – equity sip vs fd, iPhone 5 vs Samsung S2, second hand car paid in cash vs new car on emi, buying a house with a rental yield of less than 3% vs. renting for the time being so you can buy a house with 80% down payment etc.

  6. Dear sir, would like to suggest Mr SSK based on the learning from you.
    Mr SSK here is a suggestion. Since ur in the same situation, I take references from the lead characters i.e Capt. Ajoy Athalye & Mrs Sunita.

    1. Bring down the monthly expenses to 25k from 1 lac. Don’t ask what to do, do what ever you want but bring it down to 25k.
    2. Do not support ur children further. Just feed them 2 squire meals and 2 joda kapada per anuam.
    3.Since you are staying in own house, manage expenses including term insurance and medical insurance with 6 lac p/a.
    4. Invest remaining money in mutual funds. Since take home is not clear, not able to provide exact figures.

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