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From Jeff Bezos to Warren Buffett to plebeian individuals like you and me, wealth is a perpetually evolving financial goal. As long as you have expenses and inflation and investments, growing wealth is a never-ending circle.

Much like a cat or dog trying to catch its own tail; just when they’ve managed to reach it, the tail moves out of reach.

So, in reality, is there such a thing as ‘too much wealth?’

While PersonalFN’s primary focus is financial planning, a fundamental aspect in the journey to financial freedom is, ‘Wealth Planning’.

In our opinion, wealth planning isn’t restricted to mere advice on your assets. In fact, it is the optimal process of building, preserving, nurturing, and restructuring your wealth (assets) so you can enjoy it in the current state, and also pass it on to the next generation.

The greatest investors of our times, like Warren Buffett, Peter Lynch, Charlie Munger, have all been Wealth Creators and Managers and not mere wealth accumulators. And a big hindrance in the journey of wealth creation has to be ill-defined ‘thumb-rules’.

[Read: Do You Know How Warren Buffet Manages His Wealth?]

Investors often forget that thumb-rules act as a compass in your wealth creation journey and a compass cannot replace the map (wealth management plan) of the journey.

But too often, we tend to read the newspaper headlines and do not delve deeper in the subtext, which is a grave mistake.

Here’s a case in point from one of our Wealth Planning clients, Mr Vinay Panchal (55) (name changed), who retired from his services recently. Mr Panchal was an IT engineer for the last 20 years and had successfully accomplished all his financial goals, with the sole exception of his retirement and wealth creation goal.

After a series of bad decisions and unethical planners, Mr Panchal had lost all faith in the concept of financial planners and wealth managers and subscribed to the advice of newspaper articles for his wealth creation.

In one such article Mr Panchal came across this thumb-rule, ‘your retirement corpus should be 10 times of your annual income’. And thereafter began his journey of accumulating Rs 2 Crore for his peaceful retirement and wealth management.

Mr Panchal’s annual income was Rs 20 lakhs and per the thumb-rule, all he needed was Rs 2 Crore to retire peacefully. So, he spent his remaining working life accumulating Rs 2 Crore and when he finally reached this milestone, he retired and eagerly waited for the money to grow manifolds and create infinite wealth for him.

Reality struck him after a couple of years into his retirement, when he noticed that he had depleted 20% of his corpus, and made only 4.5% return on the remaining corpus. Worried, Mr Panchal wrote to the newspapers stating his issue, and he still laughs at their response.

The Newspaper team simply replied, ’Dear Mr Panchal, the thumb-rules are generic in nature and not personalised, and you should definitely get in touch with a competent financial planner, or else you might wipe out your savings!’.

[Read: Beware Of Free Financial Advice, It Might Bomb Your Financial Wellbeing!]

‘I was aghast!’ Mr Panchal said, I couldn’t go back to work, I had promised my wife a tour every year in retirement, but the reality is I will wipe out my savings in the next 5-10 years and then what?’

‘All my aspirations of unlimited wealth creation and retiring peacefully went bust like a bubble!’

Not one to lose hope, Mr Panchal decided to give wealth management another go and were introduced to PersonalFN through a common friend, Mrs Archana Vaid (an existing Wealth Planning Client).

[Read:  Is The Elixir Of Wealth Only For The Rich?]

‘My life changed after I met you guys’, Not only did you guys ensure that Rs 2 Crore lasts me and my wife a lifetime, you also ensured that I don’t have to get back to work!’, Mr Panchal added.

‘My corpus grows at a decent 8-10% per annum. The strategy that you have recommended to me, helps me sleep at night and provides me with the regular income and makes me really happy to be your valued wealth planning client’, often remarks Mr Panchal.

We often cite the case study of Mr Panchal, as one of our success stories, because we have really helped change the course of his wealth planning journey.

From a man on the verge of depleting his corpus by 10-15% per annum to a guy touring the country, as I write this article, Mr Panchal and PersonalFN have both come a long way.

The author of ‘Rich Dad, Poor Dad’ Mr Robert Kiyosaki rightly says,” It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for”.

If you too are someone who reads only the headlines and follows generic thumb-rules, please beware. Let’s remember Mr Panchal’s journey and how we could turn his fortunes around, you could be next.

If you feel stuck in your financial situation, don’t lose hope. Connect with PersonalFN’s Certified Financial Planners and Wealth Managers on 022-61361200 or write to info@personalfn.com. You may also fill in this form, and soon our experienced financial planners will reach out to you.

PS:If you need superlative guidance to select mutual fund schemes that have the potential to provide BIG gains, want to do tax planning with ELSS, and want to know which ones are worthy to start a SIP in, PersonalFN has come up with an exclusive three-in-one combo offer. Click here to know more. .

 

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