16 December, 2017

A steady income to the family, even after you are gone!

Insurance is for providing security. In life insurance, this fundamental fact had all but been forgotten. But recently, term insurance has got a lease of life. This inspite of the fact that most insurance agents are not very keen to sell term insurance as the premium is low, medical requirements are high, chance of rejection or extra premium is real etc. However, financial planners, bloggers & media has been spearheading the virtues of opting for pure insurance policies. Hence, in the past few years, things have changed dramatically.
Online term insurance has become mainstream & opting for term insurance itself, has become fairly commonplace. Sensing this opportunity, many insurance companies have come out with variants of term insurance policies, which enrich the landscape of pure term plans.
Joint life term policies - Recently, Joint term life policies for both the spouses under one plan, have been introduced by a few insurance companies. The logic here is that if both of them are working, they can go for one insurance policy for both. Taking the policy together does not confer any special benefit. The premium goes down by just a small amount and is not really a factor.
The life insurance requirement can change over time. For instance, the spouse may stop working and she may no longer require any life insurance. Had she taken a separate product, she could just have stopped paying the premium and terminate the product. But in a joint product, it cannot be done as the other spouse, the husband, would still require the cover. Hence, in this scenario, the cover will have to be retained & unnecessary premiums need to be paid.
Also, in the unfortunate even of separation, this policy cannot be separated. Infact, one may have to close this policy completely and take up new policies, which is probably not the best option.
This product hence works emotionally and does not have real merit.
Term plans with benefits distributed overtime -  There are other variations of term insurances, which can be useful. Usually term insurance offers to pay the Sum Assured in the event of a claim. In case of term insurance policies, the amount involved can be quite significant – like, say, Rs.1 Crore. If the sum available from the policy is deployed prudently, it could be useful in meeting the goals, as well as for providing for ongoing expenses. But, in some situations, the claim proceeds may not be prudently deployed. Or it may be frittered away in wasteful expenditure or reckless investments which can result in hardship for the family, going forward.
Now, there are policies which in the event of death of the policy holder, would offer a certain amount of money ( say 10% of the Sum Assured ) as a lumpsum amount upfront & the balance in monthly installments over 10 or 15 years. This could be invaluable for families. Let’s see why.
In many families the male member tends to manage the finances. If he were to pass away, there would be a vacuum. In this vacuum, many people tend to step in and try to assist the family. However, the advice offered about finances may not always be sound and the financial wellbeing of the family can deteriorate significantly. This is a possibility.
In such a scenario, a term policy which offers staggered payments over 10 or 15 years will ensure that the family will get regular income over time. Even in a situation where the initially available corpus is compromised and lost, the consistent income overtime will help the family to stabilize, live with dignity & meet all upcoming goals.
Further variations & options -  Now, there is a variation of this policy too. The variation is that it offers an increasing payout every year for the agreed tenure of the payment. This is to adjust payouts to account for the effects of inflation.
There is another feature some of the term plans have. There is an option to increase the Sum Assured at the occurrence of predetermined life events like marriage of self, arrival of a child etc. This would happen without medical examination, upto a particular level. The premium would be set as per the prevailing age and premium tables. This could be very useful as one need not look around for another separate policy to account for increased insurance needs in the future.
Term plans linked to child goals -  Child plans have been a hit with parents as they want to ensure that the education and other goals of their children can proceed uninterrupted, even if they are no more. These policies tend to be costly.
Now, term plans have stepped into the breach and are offering similar benefits like a typical child plan would.  In case of plans which have this benefit, a certain portion of the Sum Assured ( say 50% ) is paid in the event of death of the Life Assured. The balance is paid on a monthly basis, at agreed levels, till the age 21 of the child. This would ensure that the child education or other goal will proceed uninterrupted.
The period of payout will be based on the timing of the death of the Life Assured. For instance, if the policy holder passes away when the child is 18 years of age, the regular payouts will only be for three years ( till age 21 of the child ). Hence, the monthly payout period can be much lower than in the other option discussed earlier ( where one will get monthly payment consistently for 10/ 15 years ). In the event the initial available money is frittered away, the regular monthly income can be for a much shorter period, which can be a problem area. Else, this is a great option and is a viable alternative to costly child plans.
Tax implications -   Though the amount is coming over time just like in case of a pension product, the monthly payouts are not taxable as it is still death claim payout, even if it is over a period of time. Only the investment returns of any deployed amount would be taxed as applicable. There is a positive in receiving the payout over time.
Since the payouts are going to come over time and most of it is going to be spent as they come, taxes will not be there in the future years based on investment income generated ( or it will be low ) from the regular payouts.
Conclusion –  Insurance industry has innovated wonderfully in the term plan space. First they came up with the online term plan option. Now they have come up with a pail full of variants that have great merit. The common man is finally able to ensure that his family will be well protected – in his afterlife too! His benevolent presence will be felt long after he is gone!
Article first published on Linkedin: A steady income to the family, even after you are gone! 
Author  -   Suresh Sadagopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

13 December, 2017

Staying with it & not straying…

Is it possible to ever predict which product will give the best returns in the next one year? It’s very difficult, almost impossible. However, market timing is somehow seen as the one thing that one needs to get right for financial success. Chasing returns and investing in instruments which offer the most returns in the recent past, is a favourite among investors.
However, most fail here. People latch on to a theme after it has run up quite a bit, in the process their timing of entry is really wrong. When the market turns, they do not exit and wait till it almost bottoms out - when they panic and want to exit. And then they sulk, lick their wounds and vow never to go near that asset again. Then they see another one which has risen and glitters on the horizon. They are not interested. The new asset builds up heft and is blazing forth a trail that is lighting up the country. Now the interest builds up & the thought comes up - is this the kamadhenu they were waiting for all along. And then the same pattern repeats, like before!
This has happened with Equity, FDs, gold, real estate… and now with bitcoins!
We as financial planners have seen that it is seldom that important to achieve high returns to achieve one’s goals. What is important is discipline & regularity in investing & a good choice of products according to one’s risk profile. In short, the asset allocation mix should be right.
Every person is comfortable only with a certain level of risk. The portfolio needs to be tailored based on their propensity to assume risk. This is ofcourse only one of the parameters to consider. The others are - number of years to retirement, age & life stage, their time horizon for investment, what their goals are & when their goals are coming up, the dependencies they have on their income & so on.
Based on this, we decide on the asset allocation most suited to a person. We call that strategic asset allocation. This is probably what would work best for them. Sometimes, we may want to somewhat deviate from this core allocation and add assets that could take one away from the strategic asset allocation. That may be done to temporarily increase allocation on an opportunistic basis. For instance, one can have a somewhat higher allocation to equity as compared to the desired level at retirement, as these assets may be required only after 10 years. This is called tactical asset allocation
Tactical allocation may be used from time to time; but it needs to be used carefully. The deviation from the strategic allocation should not be too much. A 10-15% deviation should be fine; but a 50% deviation would not be.
There is another reason to stay near the strategic asset allocation - that is the true comfortable allocation. The farther one deviates from it, the greater the chances of making mistakes - one may panic & exit, when the markets turn rough. For instance, when someone who is conservative by nature has added too much equity in one’s portfolio, would probably panic and sell when the stock markets drop by 20%. This would be hardly be in their best interests.
That’s the reason why we as advisors we give importance to asset allocation. Chasing various products is counterproductive. Various products give returns at various points. One needs to have the product in the portfolio to benefit from any upsides. A good, diversified portfolio that is in line with one’s risk appetite and needs is hence the best bet for a person. We have seen that most client’s goals can be achieved at just 9% posttax returns for the portfolio. If there is a need for very high return to achieve the goals, the goals have to be looked into - not the portfolio!
Getting the asset allocation right & not deviating from it too much, is the way to a well funded future. Stay with it - don’t stray. Sounds boring, I agree. But, truth is generally boring.
Is that the reason, why we find so less of it in life? :)  

Author  -   Suresh Sadagopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

08 December, 2017

Advisors vs distributors

There are several instances where we use consultants—we consult doctors, lawyers, architects, chartered accountants, and many others, as may be necessary. For instance, we go to a doctor when there is some bodily ailment and confide in her the problems we are experiencing. She would question, examine, analyse and arrive at a conclusion about the possible cause of the sickness. Then she would prescribe medicines. A fee is paid for her advice and the patient goes to a chemist and buys the medicines.
Let’s look at the alternate scenario. Everything is the same, but the doctor does not charge her fee. Instead, she asks the patient to buy certain medicines from a particular chemist. The doctor would get a cut on the price of medicines prescribed. Which doctor would you want to use, even if what you may pay overall is the same? The answer is self-evident. This example has been used to illustrate true, unconflicted advice versus advice where conflict is inherent and fully present.
Distributors have a role to play in the financial services ecosystem. There would be many customers who are looking at a basic level of engagement, which can be met by a distributor. However, a distributor is not the same as an adviser, and this is the distinction that consumers at large need to understand.


Distributors of financial instruments generally give advice and sell products that their clients need and are remunerated indirectly in the form of commission, which is embedded in the product they sell. On the other hand, fee-only advisers offer advice and charge a fee directly to the client. The argument is that the “only difference” between the two is the way they are remunerated for their advice. But are these two the same? They are not. Here’s how they are different.
Representation: Distributors represent their principal. They sell products of their principal to clients based on their own “advice”. Their remuneration is going to come from their principal, based on the products sold. A fee-only adviser represents only the client and is independent in this regard.
Conflict of interest: In such a scenario, there is certainly a possibility that distributors may sell the product that is most remunerative to them. Since they offer advice as well as products, there is a possibility that the product is not the best from the client’s viewpoint. So the issue is not how distributors get their remuneration, but the conflict of interest.
A fee-only adviser, on the other hand, offers advice for a fee. Hence, the judgement would only be based on what is in the client’s best interest as the client is the paymaster in this case.
Different standards: As distributors they need to follow the suitability standard, where they can sell the principal’s product if it is broadly suitable to the client's requirements. By this standard, they have done their job even if the product suggested is not the one with the least cost in the category or offers lower benefits in comparison to others in the category. Also, they need not worry about other categories of products which may be more suitable to the clients.
Fee-only advisers, who are registered investment advisers (RIAs) with the Securities and Exchange Board of India (Sebi), follow the fiduciary standard. The adviser is expected to put the client’s interest first, even above their self-interest. Thus, such advisers are bound to suggest products that best suit their client’s interests. They also follow higher standards of certification, documentation and compliance requirements, which again is in client’s interest.
It is, hence, clear that the difference between a distributor and a fee-only adviser is not just a matter of how they are remunerated, as various financial services intermediaries tend to argue in every conference or event. Doing so is obfuscating facts for pecuniary ends. Some veterans also opine that the regulator does not understand this and other “ground realities”. I would argue that the regulator is fully cognizant of the ground realities and that is precisely why it is tightening regulations. Self-regulation, I have heard, does not work well, globally.
Regulators need to protect investors from being taken for a ride. They may rub the entrenched participants the wrong way as tightening rules may affect incumbents adversely. But regulators have to play their role keeping in mind the larger interests. (To read the Sebi consultation paper on investment adviser regulations, go here: http://bit.ly/2sX9amO).
In a nutshell, distributors (or agents) represent the principal and not the client. This leads to an inherent conflict of interest. Also, they follow the lower suitability standard, which as we have seen, is not in investor's best interests. Fee-only advisers represent their clients, have no or lower conflict of interest, and follow a fiduciary standard. Those are the differences and they are significant from the investors’ view point. 
Article first published in Livemint: 

Advisers vs distributors: there’s more to it than only remuneration

Author  -   Suresh Sadagopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

In the Investors' best interest

There are very few people in life whom you could confidently say to be acting in your best interests. Mostly, people act in their own interests - which ofcourse is natural. The ones who act naturally in your best interests can be counted on the fingers. Your own parents, spouse, siblings may act in your best interest. Beyond that, finding those who have ones interest at heart is going to be difficult. The problem is that these people cannot advice you in all areas. So, there is a need to confide in others, in certain areas.
We go to a doctor for health issues. We have no other option. The doctor acts in your best interest and charges a fee for advice. The same is true with a lawyer, who represents his client in the court of law. These professionals represent their clients and act in their best interests. This is the concept of Fiduciary care.
Fiduciary is someone who puts the client interest ahead of everything, including their own self interest. This is so comforting, especially in specialised domains, as the family cannot help anyway.
There was a domain where fiduciaries were marked by their absence - financial services. But over the years, legislation all over the world have been moving towards giving the customers at large an option to access advice, which is in their best interest. Some countries like Netherlands and UK have even dismantled commissions on products and has moved to a fee-only advisory model to make the advice conflict-free. There has been charges that, due to this, some of the clients who were serviced earlier by product sellers have become “orphaned”. While there may be some merit in the criticism, there is merit in what the regulators in those countries have done as well. They wanted to put in place a fiduciary advisory structure.
In India, SEBI has brought in Investment Adviser Regulations in 2013, where they have sought to create a new breed of advisors who will be Fiduciaries, would advice clients for a fee, not depend on commissions from product sales & have least conflict of interest. Any conflicts of interest that may be there like commission income arising out of past assets, referral fees from other professionals etc. would need to be disclosed to the client.
There are just over 700 Registered Investment Advisers ( RIAs ) with SEBI. A beginning has been made to offer the clients a choice of the kind of advisor, that they want to have. A SEBI registered adviser will also have to comply higher standards in Education/ experience & Certification, have to undergo yearly process & compliance audits, need to maintain documentation on services provided to clients, do risk profiling & have clear rationale for recommendations made. This is a clear departure from the Caveat Emptor ( Buyer beware ) approach which is prevalent in the financial services space.
There is another development which has happened about two years back which has given a boost to fee-only Fiduciary practice - Direct plans became available on MF Utility platform and SEBI had directed that the feeds of Direct plans be made available to RIAs. This enabled an investor to access advice from a RIA for a fee and invest in Direct plans, which charge a much lower expense to the scheme. By this, there may not be much cost savings to an investor as a fee is being charged by the RIA separately; but, since the advice & product sourcing are separated, conflicts of interest are avoided.
Now, investments in Direct plans can be done in multiple ways… one could invest through MF Utility, which is an industry platform that allows one to invest in Direct plans. The other option available is to invest in Direct plans through the MF house’s website itself.
There are also many online portals which deal in direct plans like Invezta, Orowealth, Unovest, Bharosaclub, Wealthfront, Clearfunds etc., which makes investing in Direct plans easy. Many of these offer a certain level of reporting too, for facilitating proper reporting for the investor. Some of them also offer automated advice ( popularly referred to as roboadvisory ), at a charge. 
In sum, the financial services space is offering more variety to the investor & allows the investor to choose which kind of advisor to engage and which channel one could go to get their products. That is clearly in the best interests of the investors!
Article first published on Linkedin :  In the Investors' best interest

Author  -   Suresh Sadagopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

20 November, 2017

The power of Two!

A pair is a recurring feature in life. We have a pair of hands, legs, eyes, ears etc. which we take for granted. Take one out & the other is not half as effective. With one eye, we will not get the depth, with one hand a simple thing like tying a shoe lace will be an ordeal. With one leg we would just be hobbling around like, say, Long John Silver!

A pair can be very effective & in some cases is complete & will be usable only if it is a pair, like - a pair of scissors, a pair of socks, a pair of jeans etc.

In life, we have pairs alright. The institution of marriage pairs up people and makes them constant companions for life. They are to share the joys and sorrows, the ups and downs of life - their life is inextricably linked with each other,the family they create & to the larger, extended family.

Society has built expectations from males & females. Males are supposed to be the ones who provide for the family & the female aspect is supposed to focus on nurturing, care-giving, taking care of the home front & raising the kids. This cliched expectation is not really valid any longer and they have moved beyond traditional roles and has resulted in increasing participation of women in the workforce.

Still, women are yet to break off the shackles in one area - money. Finances are seen as a male bastion and most women have simply accepted that as a given. However, their participation in the area of finances would be greatly helpful. Let us see how.

Plans work well when all agree -  When the husband engages a financial advisor and creates a plan for the family, it may not capture the aspirations of the family correctly. For instance, the lady may have ideas on the child’s education, marriage, home renovation or even a new home at some future point, which may not have been properly factored in the plan. Had the lady participated in the planning exercise, the perspective would have been far more richer. When a plan is created with both spouses present, there is a good alignment & buy-in and the chance of the plan success goes up. Execution of the recommendations happens fully as they have both been party to the plan.  

A balanced perspective - The man may be the one taking most of the money decisions - may be he is better informed on financial matters & is more involved in planning for the family’s future. When he is the only person involved , the risk inherent in any decision is a factor of his own risk bearing ability & there is a possibility that it is not in line with the required risk for the family. That is where the lady of the house comes in. She has a high stake in the well being of the family. When she too participates, she is a stabilising influence and the plan and the portfolio built will be more in line with what may be most appropriate for the family.

The bugbear called Execution -  Many well meaning clients who have taken the financial planning seriously, stumble upon the portals of execution. If the client has taken on the mantle of executing the recommendations, it is a onerous exercise which would need diligence & doggedness which a busy executive would find difficult to bring forth. That is where the spouse can play an anchor role. The spouse can take on the executor’s role and can ensure that the plan moves smoothly along recommended lines. In case, they have hired someone to execute, the spouse can play the role of a facilitator & ensure they derive value from the planning exercise.

Knowledge empowers -  Many women may think they are investing in Gold when they are buying ornaments & may think investments in property are the only way to build wealth. They may also have a view that Mutual Funds are & stock markets are gambling dens. Once they start participating, they start understanding the area of finances & the various nuances, enough to break out of outmoded constructs. Over time, they develop enough sophistication & confidence that they understand the domain well enough to take informed financial decisions which will stand the family in good stead.

Initially they may be unwilling participants. But, over time, we have seen women shaping up wonderfully well, that they become the primary points of contact for anything to do with the family finances. In some cases, they also are the only ones the advisor is interacting with as their spouse is too busy and have developed enough confidence in their abilities to play the anchor role.

We have seen it work. Women can play a pivotal role, instead of being a passive spectator when it comes to finances. They say, it takes two to tango. In finances, it works wonderfully - the power of Two!

Article first appeared on Moneycontrol :

Author  -   Suresh Sadagopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

16 November, 2017

Living life & loving it!

We all think about what life means to us. While thinking about it, I’m reminded of a hindi film song from the movie Aandhi. This song showcases a slightly different context.

But, for me, it kind of told the life planning story in a nutshell, which is - A life just lived is life, but truly that’s not the life it was meant to be.

Let’s get to the song -

Tere bina zindagi se koi shikwa toh nahin
Shikwa nahin, shikwa nahi, shikwa nahin

Tere bina zindagi bhi lekin zindagi toh nahin
Zindagi nahin, zindagi nahin, zindagi nahin.

The above lines translate to -

Without you I don’t have any complaints about life,
No complaints, No complaints, No complaints…

Without you there is life… but this is not life
Not life, Not life, Not life.

This song is from the well known movie Aandhi, a typical Indian Political Drama from 1975 played by Sanjeev Kumar and Suchitra Sen as the lead actors. The plot goes like this - A hotel manager and a politician’s daughter fall in love and get married. Due to certain differences, they get separated. Years later, they meet again and decide to give their relationship another chance…

The film shows how Sanjeev Kumar ( and Suchitra ) felt that about life and wanted to mend ways by bringing back his lost love, his wife, and get meaning back into his life. We may not all be in the same situation; but don’t we all feel like that about life, sometimes… that the life we are living is a wasted life & has no real meaning.

Don’t we all feel like this sometimes-

The life we are living is good by itself with no reason to carp.
No real reason to complain, no earthly shortcoming, no pain.

Looking a bit deeply we feel -

But the life we are living is not a life worth living,
not a life worth living, not really a life worth hanging on to.

What’s missing in life?  How many of us are even willing to examine life seriously ? Many people tell me there is nothing missing. How would we ever know what we are missing,if we fail to contemplate and reflect on how we want our life to be.

For instance- Did we ever realise the importance of being connected before we embraced the mobile phone?  McKinsey had famously predicted that there is at best a market for 40,000 phones, that too among truck drivers! But mobile phones are everywhere today.

We never know what we are missing till we discover what it would be like having it. When Russian people discovered freedom after Gorbachev & then there was an army coup, people came out on the streets to quell the army that was trying to take back their freedom. The army had to retreat in just three days! Once you discover it, it becomes precious & something that one cannot live without!

Lots of times we have securely locked our heartfelt desires deep within, and many times we are unwilling to even acknowledge them. Such instances are common - we do not want our goals to jeopardize our family members dreams, our goals seem too hare brained, the moment for that goal is long gone and so on.

But these heartfelt goals/desires that can make our life fulfilling, do not go away. If they are unaddressed, they remain deep within us, as a lingering regret, a vacuum in life that could well have been realised which could have resulted in deep contentment and a sense of achievement.

The truth is, we all long for the freedom to live our life in the way that would help us achieve our potential, do those things that are meaningful, be that person we always wanted to become- in short, we want to live life to the fullest, with no regrets. How wonderful life will be if this were possible!

But, it is possible. Life Planning is a field that has the answers.

Life Planning - How does it work -  A good life planner would be able to facilitate this process and enable the client to connect with their heart’s core / soul’s purpose & nudge them to take the steps needed to make their new, wholesome, dream-life a reality. That would raise life to an entirely new level, filled with vigour & vitality and a sense of purpose.

The primary thing in Life Planning is to understand, what is that one really wants from life. There are exercises and sessions to facilitate this to bring out the true heart’s calling. Once the real goals become evident, the client will be able to develop a new vision of the fulfilling life they can now lead. This leads to a surge of excitement and a sense of urgency to move forward rapidly. The client may however need to surmount problems in the path leading to such fulfillment. The life planner would play a vital role in keeping the client focused on the end objective and keeping them on course to achieve their ultimate freedom of finding a life worth living, and looking forward from one day to another with excitement.

Once these are in place , a financial plan that would be needed to make all these happen, is drawn up. In fact, the life planner would have been working on the financial aspect right from the beginning to ensure that he/she will be able to come up with a workable plan, at the end.

Then the plan is put to action and the recommendations are implemented for the client. The Life Planner would have to stay in touch with the client to ensure that their enthusiasm for the new path they have chosen does not dim and their torch is burning with a steady flame with undiminished intensity.

In a nutshell -  In the end, we all want to live a life imbued with meaning which liberates us… we crave for real freedom to do the things that would delight us & pump up our energy… We want to become the person we always wanted to be, live to our fullest potential. We always wanted to live a life brimming with vigour, vitality and enthusiasm to look forward to the next day with thrilling anticipation. That’s exactly what life planning can deliver

Life Planning can deliver a life worth living - a life that you would love living!  

Other Life Planning Articles :

Author  -   Suresh Sadagopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

26 October, 2017


life planning
What do we ultimately want? Material riches & other achievements are not giving that sense of purpose, fulfillment or accomplishment.

Living life kingsize is something many are doing today. That has become a style statement & even more than that, to show the world that one has arrived in life. Beyond proving a point, it proves onerous to keep up the pretenses. After all the trappings of high life, too many people still remain unhappy – very unhappy. That should be surprising, even puzzling, right? Do they know something called life planning?
Many of us go about doing inane things in life; accumulate stuff / relentlessly chase material goals or doggedly pursue corporate careers thinking that these are the things that we really need to do in life. Competing with the Joshis & Sharmas brings no joy… for, when they have moved on, the ones who are competing with them also will have to! That becomes tiresome and saps one’s energy.life planning
What is the point in doing such things? What is the point in having three homes? What is the point of chasing high returns? Why compulsively go for a foreign holiday, update on FB, to show the world one is a high flier? And after having done all this, why is one not feeling on top of the world and instead feeling exhausted & fagged out?
The reason for all this is that they do not have much meaning in the first place. Doing things that are done compulsively, tire you out. Material things are certainly important & they are required for a comfortable life. A good corporate career will help one flower and achieve one’s potential in the activity area chosen. So, there is nothing wrong here – upto a point. Beyond that, it becomes a millstone around the neck as there is no meaning to running like a headless chicken, tiring oneself out.  Also, if one is in the corporate career just for the money & is otherwise meaningless, one would find it onerous to continue on that path.
We all want to do things that we like, have meaning for us, brings joy, pursue our passions & enables us to live life authentically.  We want a life which is vibrant, energizes us, that’s intensely fulfilling & allows us to experience a deep sense of accomplishment. It certainly looks like an idle man’s pipe dream, one may say.  But, this is indeed a possibility for those who would not settle for anything less.

Life Planning ticks most of the boxes and can bring in purpose, energy & meaning to life.life planning

Life Planning engagement allows a person to do some introspection, dive deep & get in touch with what would bring them true happiness, vigor, achievement of their potential and live a life imbued with meaning. If that sounds like voodoo, read on to get the correct perspective.
There is a structured way to go about it. George Kinder was one of the pioneers in the field of Life Planning. In the Kinder method of Life Planning, there are some questions & questionnaires to assist a person to organise their thoughts and imagine a deeply fulfilling life that they would ideally want to live. This will be a starting point for the Life Planner to work with the client.
The Life Planner would follow the process and explore more on the areas highlighted by the client & will be able to get a picture of what really excites the client & the kind of life that will enable them to live a life they always wanted.
The Life Planner, based on his understanding of what truly excites the client & holds true meaning for them, paints the picture of the ideal life that the client would indeed be able to lead. The planner lights the torch of possibilities & helps them visualise a life imbued with meaning which will give them immense satisfaction. This is a wonderful moment for the planner & the client, for they would both be able to see what kind of possibilities exist for the client as a consequence of this work!
This visioning process is very important as many clients are unable to visualise the glorious life they can really live!  When the Life Planner paints their future life & the client sees themselves there, the excitement surges & the primal urge to get there builds up. This is important as the transformation could call for a leap of faith, which one would be willing to take, only if the end result is sufficiently exciting.life planning
The Life Planner works further on the client when the client may see obstacles in the path of reaching their cherished goals. The Life Planner will have to keep the flame alive, lest it gets dimmed or put out by the doubts & second thoughts that the clients have. The problem with many is that they just can’t believe that their life can transform to the extent that it’s almost magical!
Once the conviction is established, the Life Planner would work on the numbers and create a financial plan to give shape to the new life that the client now wants to live. The financial plan will consider the finances of the client, along with the new goals and come out with recommendations on what they need to do. These recommendations will need to be implemented so that the plan would produce the desired results.
This leads to complete fulfillment as the Life planner started with what is very important and meaningful for the client, made them see that life unfolding for them, walked them through the potential pitfalls & helped them navigate the white waters of self-doubt. Then the planner creates a financial plan that optimally uses existing resources & produce the desired results for the client. The life planner would keep monitoring the situation and offer counsel to the client so that they continue to stay engaged in the path of a glorious, almost enchanted life that’s immensely satisfying & let’s one look forward to every new day with unalloyed excitement. That’s the Life Planning cycle.
Life planning engagement is transformational. It facilitates one to change gears or even change course to new possibilities & maybe a new life! We only have one life. We owe it to ourselves to live a life that’s vibrant, allows us to reach our potentials & is one wonderful, exciting journey.

Article first appeared on FPG India Financial Planning :


Author  -   Suresh Sadgopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7

22 October, 2017

Do life planning before financial planning!

Financial planning is not all about planning your monetary goals, there is another relatively lesser known concept called life planning.

“In preparing for a battle I have always found that plans are useless, but planning is indispensable,” 

said former American president, Dwight Eisenhower.

Planning is essential for everything as it is when we plan that we are able to come to different possibilities, some good and some bad for the project at hand. This holds true when we are planning our finances as well. However, since life is dynamic, a plan created with all known information at one point, may not be true after some time. Life situations change and so can goals, expenses, income etc. Hence, the plan would need to be reviewed and recast – something that is part of the planning process itself.

Now, financial planning is not all about planning your monetary goals, there is another relatively lesser known concept called life planning. Life planning helps in planning for those goals that can bring meaning and happiness to our lives, instead of focusing on achieving just the monetary goals.

All of us have goals - like buying a home, a second home, foreign holidays, cars etc. We focus on these and plan and save to achieve them over a period of time. But, the important point is, do these goals bring true satisfaction and a sense of achievement to a person? Unfortunately, in most cases the answer is no.  

It is not to say that these goals are not important. While we do need the money and the conveniences it brings, we should not become its slave
When we pursue goals that don’t really matter and spend time and energy achieving it, we feel tired, burnt out, exhausted. And once we achieve it, there is no satisfaction or delight in having achieved something since these were meaningless goals in the first place, which were probably taking them away from the real goals that would give one a sense of achievement.

How does life planning make a difference?   
There is no set formula on how you have to live your life. The life we have is the only life there is and we have the option to make it meaningful. But, for that, we need to understand what is meaningful to us and what is it that we really want from life.

Life planning precisely addresses this. This is a new area where the focus is to find out what is truly important for us in life, what will deliver that freedom from the bondage of a humdrum existence. Do you want to get involved in more charitable work, do you want to change your career to something that is closer to your heart? Life planning helps you achieve such goals.  

To facilitate this, there are exercises to go through which will assist the client to focus on a meaningful life they have always wanted to live. There are some fundamental questions which one needs to ask, which will help them narrow down on what they really want to do in life. Once they discover their true, heartfelt goals, and see the vision of that wholesome life they can create for themselves, they get hugely excited. The life planner acts as a guide and mentor and paints that ideal life for the clients to see. This helps the client realise what a fulfilling life they can actually live and they get to experience the entire repertoire of emotions that would arise out of such a life.  

This may call for rework of one’s life as it exists today. Some of the goals which one had in the past may not retain their appeal any more. New goals would take its place, there could be adjustments in income, expenses etc. too, depending on what one may want to do going forward. One may feel an anticipatory thrill as well as a trepidation which comes from a leap into the unknown. Obstacles may present itself, which the client would resolve drawing strength and support from the life planner. The next step would be to consider all these goals and create a financial plan and implement it so that the life ahead is smooth.

Here is how life planning can work:  Let’s take the example of Rajiv. He was doing extremely well in his career, however, there was something missing. In his session with the life planner, it came out that his heart's core goal was to travel extensively, which he was unable to do in his current avatar. Rajiv was interested in combining his current skills with his passion and wanted to build start a travel business. During the discussions, Rajiv himself came with the idea of building specific communities of travel buffs and serving their needs. He is now completely fired up with enthusiasm of the amazing possibilities of this new business, which is close to his heart. The planner has now created a plan with these goals in mind and is helping Rajiv live a life filled with meaning and fulfillment.

In a nutshell

The initial portion of life planning is important as this is where the client and the planner jointly explore what is that which may make the client’s life truly lived. Once the client understands what would make their life meaningful, they get veritably excited. The new life envisaged may have problems that need to be surmounted and the planner plays a huge role here in ensuring that the client does not get disillusioned and slide back into their erstwhile existence. The life planner holds and keeps the torch of their dreams burning till the client is able to reconcile with the adjustments needed and gets the fortitude to make it happen. Then a financial plan which accommodates the new life is drawn and the recommendations implemented. From time to time, the life planner is in touch with the client to find out if they are on track and offer any guidance that may be required.

We all deserve a life where we experience the freedom in our lives to achieve our true potential and live a life that is truly meaningful. And life planning can make this possible.
When life planning is made a part of financial planning, it becomes a force multiplier for the client. As George Kinder, the father of the life planning movement says, “Life planning is financial planning done right”.

Article first published on ET Wealth:

You should do life planning before financial planning. 

Author  -   Suresh Sadgopan  | Founder | www.ladder7.co.in

#SureshSadgopan #FinancialPlanner #FinancialAdvisor #Fiduciary #LifePlanning #FeeOnly #HolisticAdvice #Ladder7