Dear Anu..I am 46 yr old, MS (Mech. Engg.) and been working in a stable job for 15 years now. However, am facing lots of hurdles currently in getting my employment contract renewed or so. I have been doing this current job of mine for the past 15 years now. I have become a bit insensitive to the things happening around me and it's difficult to imagine myself in jobless position in a months' time or so. That way, I find myself in rather precarious situation in prioritizing my future plans as of now, as I have been in a comfort zone for years. Either to opt for Foreign Immigration to AUS/CAN or UK, or hit the right professional job in India. I am married with three kids, grades 10, 6 and 1 respectively and any misstep of mine can jeopardize their well being and this very thought is dragging me into the "indecisiveness" mode.. Kindly advise, Thanks..Faheem

Ans:

Dear BT,

It’s nice that your children have assured you, but this may not allow them to go ahead with their lives.

Maybe it’s time for you to take a step back and evaluate what exactly happens at each job or assignment.

You may never be able to change your external environment, but certainly you can change the way you think or act on it.

Are you being hasty and changing jobs because of high expectations from the job or an ideal work environment?

At times, it takes a lot of resilience to stick with challenges and pressures from the top management to thrive in a work scenario.

Now that you are back in India and have begun to reflect on what is going on, maybe it’s time to look at other working options.

After the pandemic, hybrid and work from home models are becoming widely accepted ways of delivering job responsibilities.

Also, you may want to look at Freelancing if your field of expertise can make this option lucrative for you.

You can also look at consulting which given your span of career may also be a good career option.

Whatever you choose, challenges are going to a part of it.

I can only suggest that you work on a mindset change and treat these challenges as growth paths else you will continue to feel sorry for yourself and forget that: Change from within for a better outcome is the only thing that lets you sail through challenges and makes you a well-rounded person.

All the best!

Ans: Hello,

To begin with, thank you for getting in touch with us. We do offer classes for GMAT. If you are looking forward to prepare for the same, please contact us for more details so that our experienced team can evaluate your profile and guide you accordingly.

For more information, you can visit our website.

Ans: You are currently 47 years old, working in an unstable sales and marketing job in the healthcare sector in the Gulf. You have nine months left in your contract and face uncertainty about future employment. You earn Rs. 2.65 lakhs per month, and after living expenses of Rs. 1.25 lakhs, you send Rs. 1.4 lakhs back to India. Additionally, there are ongoing medical expenses amounting to Rs. 12 lakhs, plus an extra Rs. 2 lakhs that need to be met within the next nine months. You have some key financial commitments in the form of LIC, ULIP premiums, and health and car insurance, amounting to Rs. 2 lakhs annually for the next two years.

Your assets include a home, a plot in your hometown, two rental houses earning Rs. 10,000 monthly, agricultural land, Rs. 5 lakhs in equity, and Rs. 8 lakhs in cash savings.

Let’s break down how you can manage your financial situation, especially if you must return to India abruptly.

Assessing Cash Flow & Medical Expenses

Your current salary provides you with Rs. 1.4 lakhs to send back home every month, but there is a pressing need to cover medical expenses of Rs. 12-14 lakhs over the next nine months.

These medical expenses will eat into your monthly savings or cash reserves, which means you may face a liquidity crunch in the short term. It is essential to ensure you have a clear plan for covering these medical costs while continuing to save for future needs.

What You Can Do

Create a Medical Emergency Fund: Allocate a portion of your Rs. 8 lakhs in cash reserves specifically to handle these medical costs. This will prevent unnecessary pressure on your monthly cash flow and give you peace of mind. You can then prioritize building this fund up again once the medical expenses are over.

Prioritize Savings: Focus on increasing your savings, even if that means slightly cutting down your living expenses abroad. See if there are areas where you can cut back or reduce discretionary spending to boost your savings buffer. Even saving an extra Rs. 10,000-20,000 monthly can help.

Evaluating Investment Commitments

You have insurance and ULIPs as investments, with returns starting from December 2026. However, these investments are likely not yielding optimal returns due to their high costs.

What You Can Do

Review Your Insurance Plans: If possible, check if any of the insurance or ULIP policies are underperforming. Given that their maturity is still a few years away, it might be wise to consider if surrendering these policies and reinvesting in more flexible and higher-yielding options like mutual funds will benefit you. Consult a Certified Financial Planner to guide you in this area.

Switch to Regular Mutual Funds: If your focus is on actively managed mutual funds, you should consider shifting some of your insurance-based investments into well-researched funds through an MFD and CFP. Actively managed funds have the advantage of being able to outperform index funds, especially during volatile market conditions. Since your ULIPs and insurance may have higher charges, they could hinder your returns compared to mutual funds.

Why Avoid Direct Funds: If you have been considering direct mutual funds, it’s important to know they can sometimes result in missed opportunities or inadequate management due to the absence of a professional advisor. Regular funds, when invested through a trustworthy MFD with CFP credentials, can outperform direct funds because they offer better fund selection, continuous monitoring, and timely adjustments.

Managing Assets and Liabilities

You have various assets: property in your hometown, two rental houses bringing in Rs. 10,000 per month, equity investments worth Rs. 5 lakhs, Rs. 8 lakhs in cash, and agricultural land that is barren.

What You Can Do

Maximize Rental Income: Rs. 10,000 from two houses is a modest amount. You may want to assess if there is potential to increase this rent over time. If you feel that these properties are not providing enough returns, consider renting out the home or plot in your hometown as well. Since you don’t have plans to live there right now, renting these out may provide a steady cash flow that can offset your living expenses in India or abroad.

Reassess Agricultural Land: The agricultural land isn’t generating any income, which can be a missed opportunity. You might want to explore leasing it out to someone who can cultivate it. Even a nominal rent could be beneficial, as the land is otherwise lying idle. This would also reduce maintenance costs and make the land more productive.

Strengthen Equity Portfolio: You have Rs. 5 lakhs in equity investments. While this is a good start, considering the potential of equity to generate inflation-beating returns over the long term, you could aim to increase this allocation. Since equities can provide better returns than ULIPs and insurance policies, focusing on this area will help in wealth accumulation for future needs.

Evaluate Gold as an Investment: If you have any idle gold investments, you might want to consider their value. Gold can act as a hedge against inflation, and selling or leveraging it in times of emergency could provide you with immediate liquidity. This can be an option for medical expenses or any abrupt changes in your income.

Retirement Planning and Building a Safety Net

Since you are 47, it’s important to start thinking about building a retirement corpus, especially if you return to India soon. You should aim for a financial plan that provides income stability for the long term.

What You Can Do

Continue Building Emergency Fund: Given the uncertainties in your job, focus on creating a solid emergency fund. Ideally, this should cover 12-18 months of your expenses in case of job loss or a sudden need to return to India. With your living expenses at Rs. 1.25 lakhs monthly, you would need a fund of Rs. 15-20 lakhs. This will give you a cushion while searching for jobs or setting up income streams back home.

Build Your Retirement Portfolio: A retirement corpus should be a top priority at this stage. You can create a mix of investments, focusing on debt and equity mutual funds to balance risk and returns. Avoid relying heavily on insurance products like ULIPs, as they may not provide the liquidity and returns you need for retirement planning. Regular SIPs in diversified equity funds can grow your portfolio faster than ULIPs.

Ensure a Stable Post-Retirement Income: Since you own properties and have rental income, you already have a base for post-retirement income. You can further enhance this by investing a part of your equity or savings into high-dividend-paying stocks or mutual funds. Also, systematically investing into debt mutual funds closer to your retirement will ensure a predictable income stream.

Job Uncertainty and Transitioning Back to India

Since there is a chance you may need to return to India abruptly, it's essential to have a plan that ensures financial security during the transition.

What You Can Do

Build a Buffer for the Transition: You may not find a job in India or abroad right away. Therefore, it’s important to create a transition fund to cover at least six months of living expenses. This should be separate from your emergency fund. This buffer will allow you to take the time to find a suitable job without financial stress.

Explore Freelance/Consulting Work: Given your experience in sales and marketing in the healthcare sector, you may want to explore opportunities for freelance consulting or remote work. These jobs can give you flexibility and a backup income source.

Invest in Upskilling: Now might be a good time to invest in upskilling or gaining certifications that can improve your chances of finding a new job in India or abroad. Explore courses that are in demand within your industry and sector, whether in digital marketing, healthcare innovations, or related fields.

Final Insights

You are in a challenging yet manageable situation. Your key focus should be on building a solid emergency fund, reviewing your insurance-based investments, and increasing your equity exposure. Since job security is uncertain, preparing for a possible return to India is essential. Maximize your income sources, whether through increased rent or alternative job opportunities like freelance consulting.

You already have a solid asset base, but liquidity and future income stability are crucial. Ensure that your investments are aligned with long-term growth goals and provide flexibility in case of sudden changes in your employment status.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
Instagram: https://www.instagram.com/holistic_investment_planners/

Ans: Meharban Sir, Thank you for your question. I have responded to a similar question recently. You may check my answer here
If you are looking for more details, I would be happy to assist/guide you. All the BEST for Your Prosperous Future.

To know more on ‘ Careers | Education | Jobs’, ask / follow Us here in RediffGURUS.