finding it difficult to save. %his is because they have other major epenses such as penthouses, bungalows, and so on. *ince these are big ) ticket items, surviving debt and maintaining these often result in a li#uidity crunch even for affluent families with very high incomes. *ome people, especially business owner and professionals, take on loans because their account ants advise them to do so from a ta planning perspective. %his is primarily to harness the advantages of depreciation and interest deduction. However , such ad+ hoc decision are considered without taking a holistic view of the familys li#uidity , present needs and future re#uirements , which often puts a family in severe cash flow problems. Although it sounds stereotypical most people hoard real estate like there is no tomorrow. $ne of the biggest reasons is our love for real estate, which many feel are great investments. Besides there is an abundance of black money in the system and many people have a lot of income in cash that can be comfortably cushioned in real estate investments. Additionally, they believe that not only is real estate insulated from market vagaries, but that it also gives stellar returns along with ta benefits. As a result, they borrow to invest in real estate and are leveraged !which means they take on debt"
Most people &%y life ins%ance as an investment and p%mp in a lot of money into life ins%ance as a !ate ta5 savin! tool and many people ae enamo%ed /ith ta5 savin! inst%ments- 3esides the fact that most people ae so &%sy /ith day to+ day activities. they often /a0e %p &et/een Dan%ay and Mach evey yea to do somethin! to save ta5
. %he answer is very simple. -ets buy a life insurance policy. In any case my friend, banker or family member has been after me to buy one./ 0ue to such adhoc purchase, most people end up with a plethora of irrelevant policies. %he best part is that most people pay high premiums and get a very low cover. 0espite paying high premiums, most people are under+ insured when it comes to life insurance in a big way. %here is no assessment of the actual financial risk their family will face, in case of their premature death, and most liabilities are not covered. At the same time, they have negligible or no critical illness cover, negligible disability cover, no income protection and no social security benefits. %his area must be ade#uately addressed to ensure lifestyle maintenance, wealth creation and wealth protection. %he portfolio of must people would probably look like this1 more than 23+43 5 in real estate investment , 63 ) 73 5 in debt !&&8, insurance policies , fied deposits , bonds and post office ", 2+93 5 in cash ! saving account , short term fied deposit and cash ", gold !primarily bought as jewellery " and very negligible e#uity . (ost people have just these investments1 :eal estate, &&8, '&8, !for employed people", gold and insurance policies. ;onsidering that people are getting busier by the, sometimes they do not even have time for their families. %he little precious time that is available is completely for the family and most of the time, financial planning takes a backseat. %his is when people end up taking decisions based on advice of different sets of people !chartered accountant, colleagues, banks, real estate agent, family members, insurance agents and financial advisors". %here is no co ) ordination between all the advices sought from these