Align Plan With Goal, Risk Tolerance

Queries

S. Anand Naidu, Bengaluru

I work as a software engineer and have been working for the last four years. I have used all my earnings on travelling and buying stuff and have nothing much in hand. But seeing my friends saving their salary for a house, I think I should do it too. I want to invest in property just to get returns as I live with my parents and don’t need to buy a separate house. Please suggest what should I go for: a house or a piece of land? How should I save money for it?

Investing in real estate can be a substantial financial commitment and might not be the ideal choice if you’re young and just starting to build your financial portfolio. You might have to take large loans to buy even a small property, which is not a good way to start an investing life.

Instead, consider diversified investment options that are more liquid, can be built up with regular, maybe monthly investments from your salary and are easily manageable for young adults like you. Begin by setting up an emergency fund to cover unforeseen expenses, typically your 3 to 6 months’ expenses, and then explore investment avenues like mutual funds, stocks, or exchange-traded funds (ETFs). These financial instruments offer liquidity and can potentially provide better returns over time if done with due diligence. Such avenues also allow you to increase or decrease your investments in case of financial adversities. It may be better for you to seek guidance from a financial advisor to create a personalised investment plan aligning with your goals and risk tolerance.

Col. Sanjeev Govila (retd), Certified Financial PlannerCM, CEO, Hum Fauji Initiatives

Ramesh Mahto, Hazaribagh

My grandmother passed away recently. While my father asked her to write a Will, she has been indecisive and didn’t do it. Now my father, his brother and two sisters discuss how to do it but can’t reach a consensus. Meanwhile, my mother found a handwritten paper by my grandmother  clearly mentioning how she wanted to divide things among her children. Is the paper valid as a Will? It is signed by my grandmother.   

The document discovered by your mother does not meet the legal requirements for a Will and, therefore, cannot be acted upon as such in a court of law. A Will written entirely by the testator in his/her own handwriting is commonly referred to as a “Holographic Will”. However, as per the mandate under Section 63 of the Indian Succession Act, 1925, a Holographic Will, like any other Will, requires compulsory attestation by at least two witnesses. In the absence of such attestation, a Will cannot be said to be validly executed. As per the provisions of Section 63 of the Act, for the due execution of a Will requires the following:

• The testator should sign or affix his mark to the Will;
• The signature or mark of the testator should be so placed that it should appear that it was intended thereby to give effect to the writing as a Will;
• The Will should be attested by two or more witnesses; and
• Each of the said witnesses must have seen the testator signing or affixing his/her mark to the Will and each of them should sign the Will in the presence of the testator.

Thus, the said writing executed by your grandmother, in the eyes of law, is only a piece of paper having no legal effect. However, your family may choose to be guided by this document as an expression of their mother’s last wishes in a family settlement.

Mani Gupta, Partner, Sarthak Advocates & Solicitors