I met Mr. Madan Rao (name changed) in a training session on financial planning in Mangalore. He sought my consultation post-session. He was 52 years old and had his financial goals crystal clear. He said that his priority was the wedding of his two daughters and he had estimated a cost of Rs 15 lakh (as on today) for each of them. So he would need around Rs 40 lakh in about eight to 12 years after accounting for inflation. He said that the wedding of daughters in his community was a very expensive affair and naturally like every parent he wished that his daughters be wed in good well-to-do households and that the bridegroom was well educated, financially stable and independent on his own accord. He also wanted to know if he had enough to ensure a completely non-compromising retirement.

Mr. Rao, a commerce graduate, belonged to the mid-cadre of management and is a logistics manager by designation. He had worked for about 25 years in the same company, started from the shop floor, had promotions as per the company policy and will now retire in about eight years. His concerns were well founded.

In order to advice him, I requested him to bring along his income/expense details and his asset/liability details. This is what I found. He earned about Rs 35,000 per month and could save Rs 10,000 per month i.e. about 30% of his income after all his expenses and taxes. He had no debts so liabilities were zero and for assets, he had a small house in which he would continue to live post retirement. He had accumulated around Rs 8 lakh in his provident fund (PF), superannuation fund. His public provident fund (PPF) was worth about Rs 5 lakh, fixed deposit (FDs) Rs 4 lakh had postal savings of around Rs 3 lakh and maintained a bank balance that was approximately Rs 40,000 to Rs 50,000. He was a simple ordinary employee of a large public limited company employing thousands of people. I figured that his life’s savings were about Rs 20 lakh and his goals were far out of his reach.

I was generally concerned and in my mind, I was wondering as to how I would approach his situation and break the news to him that with what he had, his wishes would only remain wishes.

As the conversation progressed and as I was trying to salvage the situation to discuss options with him, he requested me to have a look at some of the equity shares he had purchased over the years. He took out a four page hand-written list of about 70 odd companies in which he had share holdings. He told me three things before I started scanning through that list. He said that he came from a very conservative background where equity investment was considered gambling and generally looked down upon.

Further, he was given permission by the women of his family to invest in shares if he promised not to trade and speculate. He lives in a matriarchal society, hence permission from women of the household. This was to the extent that his mother and wife keep possession of the share transfer booklet. So Mr Rao is allowed to buy but is not allowed to sell. If at all they sell shares it will be the decision from the women camp.