Sunday, 12 August 2012

Financial goals of urban affluent (income 12 lac+) : Goals revolve around family, income not affecting goal priorities, Buy what neighbours buy, and right product for wrong reasons!

IMP/20120813

Aug-2012

Source : Forbes India

This post is on presenting highlight on out come of the survey recently conducted by the Indian arm of the American financial planning giant on affluent urban Indian consumers ( age 28-45 with an average household income of Rs.12 lac+) living in major metropolitan centres.

The study focused on their goals, aspirations and dreams regarding their financial investment, and the factors that influence them. 

1. Financial goals revolve around family. 

2. Strength of priorities for the Indian urban professional are as under...
  •     Family essentials - 40%   
  •     Family aspirations - 30%
  •     Personal aspirations - 20%
  •     Retirement and long term - 10%

3. Income is not affecting goal prioritisation.

4. People buy what their neighbours buy!

    Investment holding patterns are greatly influenced by geography rather 
    than income, age or other demographic features.

  •     Delhi prefers mutual funds and fixed deposit.
  •     Mumbai prefer more diversified portfolio that combine riskier (equity) and secure products (fixed deposit).
  •     Chennai goes for gold & real estate (reflecting desire for social status).
  •     Bangalore shines away from investments while showing tendency towards gold. 

5. Many by right financial products, but for the wrong reasons. 

    Large number of people seems to be buying sound financial products, but
    for reasons contradictory to the actual product benefits. 
  • For example, 41% of people who invest most of their money in equity did so for reasons of secure or guaranteed returns which is counter to the basic premise of equity investments!
  • Similarly about 1/4 of the respondents who allocated maximum funds to insurance, report so doing so for high returns versus protection for their family!

You can go through recent issue of Forbes India for more details. 



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