Kailash Kulkarni

Chief Executive Officer, Investment Management

Time has no holiday, dreams have no expiry date, and life has no pause button! As we draw the curtains on 2016, we reflect on the year gone by and make new resolutions to make our lives as good as or better than last year, forever in pursuit of happiness, prosperity and security. I would like to dwell on some financial reflections and resolutions this time and hope it brings in some meaningful and valuable insights in the way you manage your spends and financial goals. Back to some rudimentary questions which have helped me many a times to revisit my own financial management and goals and tweak them if necessary. Do you have enough life insurance to take care of all your liabilities? Do you repay your credit card dues monthly or let it revolve? Is your family protected with adequate health insurance? Do you have enough liquidity available to take care of any emergency requirement? Review the life cover that you have, is it enough and more to take care of your financial liabilities, loans and your income? If not, it is advisable to increase your term cover to an adequate amount. As you do that,check on your family health insurance also, is it enough? Reflect on your spends and spending habits and make wise modifications, if necessary. For example, in this digital age most of us have credit cards and the spends on credit cards have only increased over time. It’s a good habit to pay credit card bills on time and its even wiser to let it not revolve. The “minimum amount due” payment is a vicious cycle of very high interest payment which is avoidable. It’s also absolutely necessary to have atleast 3- 6 months of liquidity available with you for exigency. Liquid Mutual Funds could serve this purpose and could be actively used as a tool to park your funds which you may want to set aside for your emergency pool. Chalk out or revisit your financial goals and milestones like buying a house, children’s higher education and retirement plan. Things become easier when you plan for it and save in a disciplined way to achieve the desired corpuses. For specific time driven goals, apart from parking your funds in traditional products like bank deposits,PPFs etc. , you may also want to look at Debt Mutual Funds. Tax Saving should not be the “only reason” for you to invest. Instead make tax efficient investments. Your reason for investing should always be a personal financial goal that you want to achieve, tax saving should be a by-product and not the sole objective. Equity Linked Saving Schemes (Tax saving Mutual Funds) can not only help you in saving tax but couldalso help one achieve wealth creation by taking advantage of its long term horizon, gain from the equity markets and active fund management. Saving regularly is one of the wisest financial habits that one can have and systematic investment plans (SIP) can help you to achieve short term and long term goals. SIPs in equity mutual funds could not just average out the effect of the ups and downs of the equity markets (what we term as rupee cost averaging), but could also give a healthier risk adjusted return over a period of 5 years or 7 years or 10 years ( Time Flies. . . . Trust Me!). As we usher in 2017, on behalf of the entire team of L&T Mutual Fund, we wish you a Very Happy, Prosperous and Healthy New Year and hope you ring in good financial habits and ring out the not so good ones. Disclaimer – This document is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. This document provides general information on performance; financial planning and/or comparisons made are only for illustration purposes. The data/information used/disclosed in this document is only for information purposes and not guaranteeing / indicating any returns. This material provides general information and comparisons made (if any) are only for illustration purposes. Investments in mutual funds and secondary markets inherently involve risks and recipient should consult their legal, tax and financial advisors before investing. Recipient of this document should understand that statements made herein regarding future prospects may not be realized. Recipient should also understand that any reference to the indices/ sectors/ securities/ schemes etc. in the document is only for illustration purpose and should not be considered as recommendation(s) from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates. Recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved. Neither this document nor the units of L&T Mutual Fund have been registered in any jurisdiction except India. The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. CL03998 Mutual Fund investments are subject to market risks, read all scheme related documents carefully. CL03998 ...