Written by Awadesh Nagar
How and why do you buy any financial product? It is important to ask this question before you put in your hard-earned money. But mostly financial product purchase decision is not driven by these two questions.
We tend to buy a product if we have cash surplus or it is hard sold to us by and advisor or bank representative. Banks have access to information on our account and they would ask us to deploy it to some other products which they show us as great option of good return. Similarly, an advisor also shows us a product and features and tells us all the good things about the same.
If we have surplus cash flow or lumpsum we commit the funds. But right way is to establish your needs first, that is knowing your financial objectives. Which may be child education and marriage, own retirement, desire to go on an international vacation, buy a dream car or home. Ask yourself how you would meet these goals and product offered to you will meet your goals or not.
I have seen investors buying a guaranteed return plan having commitment of 10-12 years and return post that when they want to send child for higher education in 5 years. A Few would take plunge in stock market with the money which they need in a year to make down payment of house in hope of quick appreciation.
Take help of good qualified financial planner to establish goals and evaluate a financial product, there are alternative option which are better suited. A good advisor must explain you how a product will meet a particular financial objective.
About Awdhesh Nagar
Awdhesh Nagar is an experienced banking and finance professional. He has good knowledge of economics and business-related matters. He currently runs his own organization by the name ‘financeedger’ which advises more than 300 clients on their personal financial planning. Awdhesh is on a mission to improve financial literacy. He considers himself responsible for the financial well-being of his clients. In past, he has worked with organizations like Citigroup, GE, Standard Chartered, SREI at enior-level position. Awdhesh has also worked for the ‘Jaipur Smart City project of the Government of India’ as a Financial Expert. He has handled investment, funding, and project finance portfolio in these organizations. He regularly visits education institutes as the uguestspeaker and provides his views on the budget and economic events on media. Awdhesh has done his B.Com (H) from Sri Ram College of Commerce and MBA-Finance from the University of Delhi WITH
.
