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How to organise your investment plans
December, 08th 2006

You spent a considerable amount of time evaluating all those investment decisions. And, you got everything spot on, right from getting hold of a financial planner you could rely on, to perfect tax planning and asset allocation. Now that those cool investments and cheap loans are in your bag, are you keeping track of whats happening with them? Are you sure you will be able to find your investment documents when you need to?

Organising investments

So what do you do everytime you receive a new insurance policy, mutual fund account statement, transaction statement from your broker, your quarterly bank account statement and various other investment documents? It is possible that you dump them in the investment drawer, hoping to neatly file or organise them at a later convenient date. If you do that, you are perhaps more organised than the rest who just let these important papers scatter all over their house. But the truth is that many of us just forget after throwing the stuff in the investment drawer.

It is true that the hustle and bustle of daily life usually leaves one with no time to file or organise ones investments. Considering the fact the most people tend to shift from one financial service provider to another in search of better returns makes updation of those records all the more time consuming. But there are many good reasons why one needs to find the time to organise ones investments. Here is a lowdown of what not organising your investment can mean.

Loss of returns: Quite possibly you chose a particular investment because of the fantastic returns it offered you. So then why do you forget to deposit that interest or dividend cheque till the time it is too late and the warrant is well past its execution date. Of course, you can always request your mutual fund or company to re-issue the payment cheque. But this involves a bigger effort than merely depositing a cheque and you may end up not doing that too. Similarly, do you periodically cross-check those direct credits to your bank account which companies or mutual funds claim that they have made.

Extra expenditure: So you haggled with your bank and managed to squeeze out that last bit of 25 basis point discount on your home loan. But you periodically forget to arrange for sufficient cash in your bank account when the time comes to pay your equated monthly installment. Now, why do you want to pay that extra penalty that your bank can charge for payment delay or default? Everything adds up eventually and goes out of your pocket. The same holds true of credit card payments, utility payments, mobile payments etc. Penalties, surcharges and interest on delayed payments only take out more money from your pocket and spoil your credit history too.

Investment can become useless: Consider this situation. You have paid your health insurance policy premium for years. And then when the day comes to fall back on that protection you have provided for all these years, you are unable to find either your policy or your cashless claim card or the contact details of your third party administrator (TPA). You may forget to pay premium on your insurance policy resulting in it getting lapsed. Of course, lapsed policies can be revived, but that only means more trouble, cost and diminished protection.
What can be done?

Here are a few things you can do, these will take up time but will eventually be to your benefit.

Set reminders: Technology has made things easier, set reminders on your computer or mobile or your planner about those days when the policy premium, credit card payment, home/car/personal loan EMI etc are due. This will not only ensure that you pay on time and save on penalty, it will help you build a sound credit history. Considering that credit records are going to be tracked, this will help you immensely in the future. Use your computer to record dates on which interest/dividends etc become due and when redemptions are receivable.

Get them in order: Certificates, account statements etc all are not only proof of your investment but are also useful to completely execute your investment decision. It is only in your interest to safeguard these and to keep them in a way that will let you access them when you need to. It will also help you identify duplication, you can then initiate steps to consolidate bank accounts, fund folios etc. Dont forget to inform your family where they are kept, you may not be in a position to look for the mediclaim card when the need arises.

Create backups: Shifting of house, renovation, theft, natural disaster or any other factor can result in your valuable documents getting lost. Do you think you are in a position to give your mutual fund folio number if the account statement is misplaced? Or your insurance policy number? One way is to note these important details down separately. Along with this, you can also create multiple copies and store them at separate places.


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