Amazing how people can do WRONG things, just because it is convenient.
Had been to a friend’s house and his wife told me that they had redeemed some mutual funds to pay an EMI. I was quite perplexed because he had not told me about the new asset acquired – a Rs. 2.4 crore house in Gurgaon.
As usual I probed. He was on a business trip to Gurgaon and saw an offer – Rs.40L down payment and the balance in installments, and possession in 2016. The builder had told him that he would take money on a Quarterly basis, and he thought he would meet it from his salary by stopping the SIPs. So he did stop his SIPs, and started keeping money in his savings account.
However the construction was faster, his wife made a trip to the builder and had suggested changes worth Rs. 10 lakhs, the interiors had to be done (approx another Rs. 20L) – all this was taking his toll.
SO THE WITHDRAWAL FROM HIS mutual fund. I asked him he said “market is very high, so I pulled out” – first time this guy was having a ‘market’ view in his life!
I did not mind his 69% allocation of assets to Real Estate, I did not mind anything…but asked him a few questions..and here are his replies:
1. Why did you withdraw from your mutual funds – debt, equity, and balanced funds (gold left intact)?
Ans: Withdrawal was very easy! I printed the form signed it and couriered it. In 2 working days the money was credited to my account.
2. Why did you not withdraw from your Endowment plan?
Ans: It was too much of a hassle – I had to fill up some forms, and they would charge interest on the borrowings, etc. I thought it was too painful
3. Why did you not encash your National Savings certificate, withdraw from your PPF or own PF?
Ans. ——–ditto———- to 2.
4. Do you plan to live in Gurgaon?
Ans. No, of course not. We will give it on rent.
5. To give on rent, why are you spending Rs. 20L on the internal furnishings?
Ans. The broker said ‘Nobody will take on rent unless you have the basics like a kitchen set, airconditioner, etc.
Seriously I have no comments, happy to receive YOUR comments and feedback…
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