Taking Shelter of Gold & Real Estate?


Do you love hoarding money in gold and real estate?

Well, don’t get carried away from your bigger goal!

Doctors are the ones for whom being ‘pretty good’ is not enough. They want to be the best. They are the ones who fight extremely hard to get into med schools, endure late-night shifts, long hours and stand on their feet all day to heal others. However, things have changed a lot in the last decade which has changed the paradigm of the principles of good practice and conduct. In doing so, their schedules run haywire almost every day, they constantly help people, work and improve their practice standards without thinking of the clock. 

In the process of rushing for all these, they get very less personal time to spend on understanding the various investment avenues which can help them build and maximize their wealth. Taking a look of Indian investors’ portfolios gives a major glimpse of real estate and gold. However, over the past few years, returns from real estate have not been so attractive. On the other hand, gold does not give attractive returns in the long term and has a high transaction cost too. Apart from keeping gold or real estate for self-use, investments in these two asset classes don’t make much financial sense. But the current volatility and uncertainty in other asset classes have prompted investors to turn to more comfortable and familiar asset classes such as “Gold” & “Real estate” as they anchor strong in turbulent times.

Gold prices have seen an upsurge, riding expectations of monetary policy easing from major central banks. The US-China trade war, with new tariff announcements, has pushed gold high as investors rushed for safe-haven assets. In times of volatility or crisis in the stock markets, gold as an investment performs better than equity. Investors who invested in gold are better off compared to those who put money in equity this year. But when you are making money decisions you need to look at all the possibilities and options available as that money can help you stretch your personal as well as professional boundaries.

Although it sounds stereotypical, most doctors hoard real estate like there is no tomorrow. One of the biggest reasons is that they have a lot of income in the form of cash that can be comfortably cushioned in real estate investments. Additionally, they believe that not only is real estate saviour of hard times but also safe from market volatility also it gives stellar returns along with tax benefits. As a result, they borrow to invest in real estate and are leveraged (which means they are even fine to take debt).

Like most Indians, doctors too have completely forgotten the Indian real estate crash of 1995 and the subsequent hush for several years until 2003. This is a very dangerous strategy to adopt as this can prove to be lethal during real-estate crashes, especially since real estate is an illiquid investment.

Each investment option has it’s own pros and cons and the ideal way to plan your portfolio involves diversifying your investments into various segments to handle the risk to reward ratio. 

Perse, equity has over-performed major investment avenues in the long run but it doesn’t mean that your whole portfolio should go into equity. You need to analyze your goals like your education, practice, family goals, start-up, entrepreneurial goals, etc. 

Think early and manage your finances well. While diversifying your portfolio, don’t overlook the significance of tax-treatments of those assets. Consider and compare everything to find out the best for you.

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About the author

Ms Mashru is a CHARTERED WEALTH MANAGER (CWM ) by qualification and a Financial coach by choice. She started her career in finance and later realized her passion lies in discovering peoples financial DNA. She is a founder of PLANTRICH CONSULTANCY LLP and the Co-founder and Chief Financial coach of VAMA PLANTRICH LLP. She has also been on the panel with NDTV and has been awarded an innovator in finance by international Women Leaders Forum for 3 consecutive years. She has also been a Million dollar advisor for last 6 years. She has bagged 25 more accolades in the last 10 years. She also takes lectures for various courses on personal finance and has been a guest lecturer at business management colleges. She is frequently invited to television talk shows as well. She has been certified by George Kinder on seven stages of money maturity.



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