Like I have always said that financial management is a beautiful subject as there are always clear cut answers to your questions but this is provided you ask the right questions.

In the above questions you are basically asking what is the best product to buy? Now the questions have many answers depending on who you are talking to. But suppose you were to ask; what is the best strategy for me? You can be sure you will receive probably no answer.

That’s because most financial advisors are not trained and geared to answer this. They are trained on products. Their product manufacturers tell them that their product is the best and give them a story to prove it. The advisors believe so and hence act as instructed. It is not their fault but you will have to wait while things change over time. But therein lies the dilemma. You cannot wait till times change. You have to act now. What should you do?

The generic rule is to stop buying products, asking for product demonstrations and features.

Look for strategy. In the absence of strategy providing advisors you have no choice but to create your own strategy. How should you go about doing this? Count all your money wherever you have it, whether bank or into some instruments. Wherever applicable take the current market value. The total you get is what you have.

I understand that you cannot make a strategic financial plan on your own, however, you can do the next best thing which is prepare a strategic investment plan in a manner geared to generate wealth over years. Thereafter, whenever you get a financial plan done by qualified experts it, would be a rearrangement of your investments towards your life’s financial goals.

Here is a glimpse of what a strategic investment plan may look like.

Naturally, the strategy would depend and differ from one individual to another. This is just an example.

1. About 5 per cent of money as liquid cash in a bank account or fixed deposit as you prefer.

2. About 10 per cent in bullion – gold, silver, platinum, palladium, etc.

3. About 5 per cent of money towards insurance premiums — any more is not a productive use of money

4. About 10 per cent of money in fixed interest bearing instruments – the ones that gives you a real rate of return of at least 3 to 4 per cent. Real rate of return is the return actually earned minus the inflation rate.

5. About 55 per cent of money into equity and equity related instruments.

6. About 15 per cent in alternative wealth instruments such as land and property. If you don’t want to follow point 6 or don’t have enough to actually do this you can allocate 15 per cent to point 5.

7. This strategy above can produce a minimum rate of return of 12.25 per cent p.a. over blocks of every 3-5 years. The beauty of this strategy is that almost 70 to 75 per cent of your money is liquid or near liquid at any time. This gives you great flexibility to take advantage of prospective opportunities.

Did we forget something? Risk management is what you are perhaps thinking. In my view risk management today is presented and used by most advisors as a marketing concept more than a financial concept. Most people do not understand risk and how it is to be managed. If you as a consumer is saying balanced risk you are saying this from an immediate perspective as you are scared and feel that at least half my money is very safe. But if you decide to invest in an diversified mutual fund for the next 10 years it is almost certain that you will make money and far more money than what you would make in a FD or PPF or similar. So where is the risk then? As a consumer, if you plan to build long-term wealth you do not need to decide and worry on risk levels it is the advisor who must control risk in the deployment of your funds over time. Even that is part of good advice and a good strategy.