well thats true people get stuck in situations like these, having assets which are apreciating in value but not productive or under productive in terms of montary gains.....
well they have fixed assets so dont need to worry abt that now what they have to do is create a source of income from what they have got
having rs 1 crore in bank is real depressing any one who belongs to a succesful business family knows where he can get better returns and he also has contacts where he can set up a business which might not require a very big office or a showroom in prime location
he can become a supplier of goods in govt dept say computers/stationary,whatever it might be if he works deligently he will surely do a lot better than a mere 6% by the bank gradually he can move on expanding his business
basically its only dearth of income and liquidity which can be taken care of if that person manages his assets well
needless to say many ppl would kill to have the kind of assets/background mr malhotra has
"security depends not upon what you have,but on what you can do away with" - this was the thought for the day i had seen a long time ago at khadi bhavan
In my view they have only 2 cores in their reach to do something. (RBI Bond Investment - Rs 1 crore ,jewellery and diamonds - Rs 75 lakh ,PMS (Portfolio Management System) schemes - Rs 25 lakh ) so they can sell 50% of their jwellary &RBI bonds, so with PMS they have total 1 core . Now they have to take risk . Now they should invest this money in eqity mutual funds so at least they will get around 30% annual returs. so their liquidity problems will be solved after one year.so 30 lakh profit will be sufficient to take care of all nedds. then they should try to concentrate on how they can solve the property dispute. even they can put remaining 50 lakh in monthly income plan of post office,which is tax free.so they will get some handsome returns for the first year liquid cash. so lets hope they will be able to make way out of their crises.
It is depressing no doubt, but ideally nothing in life is worth losing your sleep over. This is what I propose he can do
- Take a loan against property, which he can easily claim upto 3-4 crores, on a monthly payback - Possibly sell off his beach property. Wit that, he suddenly has 5-6 crores to spare - Settle his sons fees in the US, so that is out of the way atleast - Invest some of the cash in fast return schemes - Invest some in PPF/NSCs to secure his future - Pay off the EMI with the RBI bonds that he has.
That should lessen his financial tensions and make him more free where his finances are concerned
The title of the article says something and the content is has something.
Anyway this is not something new for rediff. I did not understand the purpose of this article because from the financial learning point of view this has no value at all.
Great Article, especially for people who think that having wealth and assets would put you into a comfort zone. The best way would be trying to save as much since the first day you start earning and maintain a not so very expensive lifestyle.
I have faced similar situation in my life.. and still facing it and the worst part is I dont even have that many property to cover my liabilities and maintain my lifestyle.. The best thing I did is to find some new source if income and quick and harsh decisions.. for e.g
Malhotras can take home loan against their property peder road house and get some cash with low intrest..
Ask their children in usa to supoort them..
Buy some properties in suburbs for 10-15lakhs and sell it in 3 yrs for 20-25 lakhs whcih is sure return with less risk of loosing money and during the the time they can rent out their new property in suburbs to get soome cash flow..
they need to move faster it is in reach as long as they dont have liabilities of their own to pay..
As bad times come and go in the life so as with Mr. Malhotra. But in any case he shouldn't loose his confidence at all. He can check variety of options for his future. I think the problem he has created will have to be solved by himself only with self decipline and in oraganised manner.
There are lot of examples where people stood up like phoenix from ash.
