Mutual Fund Corner: Masterclass on financial planning

On personal finance, Azeez said, "It is not like everything needs to be customised. It needs to be customised because the needs of a person are different, the risk appetite is different, the number of dependents one would have would be different, the expenditure pattern could be different, and the time left to own could be different. So there are so many things that are so individualistic, that it cannot be one size fits all, point one. Point two, having said which it doesn't mean that every nitty-gritty has to be customised and the third point which I would like to make is, it is very important to spend the time to understand the uniquenesses of your current situation, and then devise your expenditure pattern and then, in turn, your investments which are all going to be personalized in nature.”

He added, "But don't try and deliberate and procrastinate so much in terms of customisation that we don’t even begin. Having said which you have to keep your life goals, your life status, your expenditure, all that in mind and create a very robust financial plan to have great well-being."

On individual goals, Krishnamoorthy said, "The starting point is to try and envision your financial future, as you envision it, you will be writing down a lot many things on that piece of paper. I always encourage people to look at it and ask this question, is this what I need or is this what I want? The moment you start putting a bracket against each of them, and you say, this is my need and this is my want, so on and so forth finally, you have a list, which tells you that these 10 things are my needs, and these 20 things are my wants. Focus on your needs first, you really need to have them that is why you have estimated that that is your need. Always bounce this off with somebody else who is neutral, not vested in it, but who is neutral, who looks at you, and you can ask you those questions with a straight face.”

"The moment we are able to segregate the needs versus the wants, and then we can start focusing on the needs first, they are the first priority. If we have space and scope to take care of it, then go to the wants. Like I always say, if we are not sure about all of these assets, then the simple thing we can do is consult a professional," he said.

Azeez said, "Asset allocation is nothing but distributing your money across different established asset classes. When you distribute your money, then you are not dependent on one specific asset. So what you get in return for doing asset allocation is the diversification which is an outcome of asset allocation."