Are you happy with your returns ?
Do you review your investments ?
Investment and Insurance needs monitoring once in a while. When ever i say the need for savings and investments, people just say that “ i don’t have enough money this time ”.
Another profound reason is, i have already invested in Insurance, stock market, mutual funds etc.
Are you checking your returns ?
I have a friend who wants to invest in mutual funds based on the discussion with his friends. So he finally approached and asked to share the details about mutual funds. I shared the informations. Finally said he needs some more time. After 6 months, again he called me to invest. Already 3 months delayed.
On further probing he revealed that he has invested in an ULIP policy. He wants to know the prospects of that investment. Investment was started almost 7 years back and his investment in this fund is around 2.3 lakhs. After 7 years it has just grown to 2.65 lakhs. Returns are not even comparable to savings account.
Recurring deposit account would have fetched better returns in the same period.
By another referral, had an interaction with a Doctor who wants to know about her investments. Their family put together has been paying a premium of 8 lakhs per annum for 50 lakhs coverage policy. She somehow came through that this as mistake.
She was in dilemma to close the policy as she has already paid more 12 lakhs. Another 12 lakhs by her husband. Then gave her a solution of converting the existing policy as paid up policy. By this way the paid amount will not get wasted. Policy coverage will be reduced from 50 lakhs to 12 lakhs as that is the premium paid till now.
She is much relieved now.
Whenever you have doubts on your returns, please cross check with “Rule of 72”.
Why you need to review ?
Most of you might invest out of peer pressure. Some neighbours would have told to invest in that. Please consider that it is your hard earned money. Wrong investment can reduce your returns potential. At times resulting in entire loss of money. Generally you can consider reviewing once a year so that you know the status.
You would have invested X amount and feel contended that it is huge investment from your side. In those situations list down all your goals. Goals can be for the present, immediate future and long term goals. Analyse the amount needed for all those goals.
Mostly you will fall short of your investments.
During review you will also review your insurance coverage. One of the reason is your debt exposure would have increased. Your family size would have got increased by the birth of new member.
You can also check your emergency corpus once in 6 months. One of the client earns more than 20 lakhs in a year for the last 4 years. He said has invested in insurance. Finally upon sharing enough information he has chosen to close one of the policy. He wouldn’t have closed this policy if he has not reviewed this policy.
Reviewing your entire portfolio is like doing a yearly health check up.