How to Juggle Investments Across Cities: A Case Study in Financial Planning

By BankBazaar | July 2, 2015

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Ever noticed the gleam in the eyes of jugglers who perform at circuses or talent shows, juggling hoops, flaming torches and knives with aplomb? Well, Krishna Prasad was one such juggler.

Only, he juggled investments.

Smart investment decisions require you to have patience and an eye for details – not unlike those circus performers. Such investors are rare but not extinct.

Meet VV Krishna Prasad, a 45-year-old engineer originally from Vizag, working in Pune. He is a well-travelled man and has covered the length and breadth of the country; thanks to his job that requires him to keep travelling.

Krishna makes good money, he painstakingly saves money and he invests it across all asset classes in an intelligent manner. He is not one of those guys, who would invest in a particular asset because his friends and relatives are doing so. He won’t invest unless he has good reasons for it.

Real estate: Value buying

Take for example, his real estate investments. When his colleagues were buying flats in Bangalore and Hyderabad, he opted for Pune and Mangalore because the property prices there were affordable and he knew that these cities were growing to be new metros.

Of course, he had bought a plot of land in Vizag 10 years earlier. Vizag being an industrial township on the eastern coast, the land prices there are on a steady roll.

Car buying

Krishna’s penchant for saving money wherever possible has earned him the reputation of being stingy among his friends. But that doesn’t deter him from going that extra mile to save money.

When he was planning to buy a car, for example, he decided to buy a car from neighbouring Maharashtra, because he could save 4% on registration tax. At that time, the registration tax on a petrol car over Rs 10 lakh was 14% in Andhra Pradesh as compared to 10% in Maharashtra.

His savings were a mere Rs 5,000 (his car was priced at Rs 12 lakh), but for him every penny counted.

Apart from being fussy or having an eye for detail, the secret of Krishna’s success is his resourcefulness. He has friends in every part of the country, one reason for this being his sales and marketing background that allows him to travel a lot and interact with many people.

Stocks and mutual funds: Fruits of early investments

Krishna has been investing in equities and mutual funds for the past 20 years; thanks to his interaction with some brokers in the 90s while giving a demonstration of trading software.

After burning his fingers in daily trading and derivatives segment, Krishna has become wiser. Now, he either invests in very good quality stocks for long-term or invest in stocks through mutual funds.

After the initial losses that he made, he has now been able to make huge gains by making investments in good stocks such as Infosys, TCS, HDFC Bank, Maruti, etc and holding them for long term. Of course, his broker friends helped him pick those stocks, many of them from the primary market.

The initial losses in the markets made him extra cautious. So, while buying the TCS stocks during the IPO period, he cross checked with his IT friends working in TCS or any other rival companies to know if it was a good company to bet on for long-term. The stock did make him richer by a few lakhs. As they say, having good friends in right places does help in the long term.

He also partly invested in mutual funds, initially in the tax-saving funds. After making good returns on tax-saving funds, he also started investing in other diversified funds. Today, he owns units of Birla Sun Life Frontline Equity, HDFC Equity and Franklin Templeton Bluechip funds.

Small saving schemes: Big gains

Krishna has dabbled in all kinds of (legal) investment options. When he started working in the early 90s, some of the small saving schemes offered double-digit returns—be it the Public Provident Fund (PPF), Kisan Vikas Patra or the National Saving Certificate (NSC).

He still makes contribution to his PPF account that he had opened in Hyderabad. He had moved to many cities but he never failed to keep investing regularly in these saving schemes. This is no mean feat, knowing that online investments have become popular only recently.

His insurance investments cannot be the most ideal insurance portfolio, as he has investments in traditional plans and ULIPs. When he had started, investing term plans were not popular, but he made sure he has enough life cover through the traditional plans. To his credit, he religiously pays the premiums every quarter or month. He recently bought a term plan for Rs 25 lakh cover to enhance his overall life cover.

Krishna may not be the copy-book investor that financial planners look for, but he has shown enough maturity over the years in the matters of investments to still qualify as a smart investor.

Maybe it’s time he switched to flaming torches and knives.


YOU MAY ALSO WANT TO:  Make sure you’re juggling your investments the right way – SIP Calculator, Compound Interest Calculator

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