• Sojan-Thomas

NRIs plan well if you want to return one day

NRIs plan well if you want to return one day

Some finer points to take note before returning back permanently : -

Do not overdo real estate investments: High income & high savings typically translate into large ticket assets such as property in India . Apart from having one primary residence where you would like to live when you return. Do not overdo in real estate from an investment point of view. Rental yield are in the range of 1 - 2% and capital appreciation will be very slow due to high supply and low end user demand.

Gold's glitter has limited value. It is not uncommon for Indian families in the Middle East to stock up on gold & jewellery. Many returning NRIs are guilty of selling off the gold at steep costs guised by jewellers as making charges & damages or pledging them to meet expenses & then struggling to recover the jewels due to lack of cash flow . Selling off accumulated gold is a tough emotional decisions too. Some investments in gold is fine , but don't buy gold every time you have a surplus to invest.

Starting a new business in India has become tougher now , due to the entry of a large number of very young people who want to be entrepreneurs. Technology is being leveraged in ways not known before and several small tasks are accomplished by service providers who reach customers at low costs. The lack of familiarity with the local markets is turning out to be a disadvantage for NRIs , given the speed of change in India . Choose carefully after considering your own skills & motivations and be willing to work with a detailed business plan . Be prepared to invest capital ahead of your return , to seed & develop your business idea.

Do not mix personal & professional relationships. Many returning NRIs begin business ventures in partnership with relatives & friends , purely based on their availability & are disappointed at the outcomes. In this age of social media , it is easier to find people with similar interests and to test projects , ideas & plans before taking the plunge. Make time to invest in such networks & be sure you have the right partners in whatever you choose to do .

Make sure that your financial assets are large enough to fund your new venture as well as your early retirement. Financial assets such as mutual funds, bonds, bank deposits, are easy to accumulate , manage and use as desired. They can be liquidated easily when needed at low costs. Regular surpluses in the earning years should be devoted to building the corpus that you will bank upon & it is a good idea to be aggressive about building & growing it during the phase when the income is more than adequate. Treat the corpus with great care on return & do not entertain requests from relatives for funding their own needs of setting up a business or buying property.

Earmark the uses for your assets as you build them. If a specific sum is needed for the children's higher education & Wedding , save & invest for that goal & ensure that it is fully funded.

If you have 10-12 years to return to India , your focus should be on ensuring that your wealth is primarily made up of financial assets ( 60 - 70%) , some inevitable property ( 20-30%) & some unavoidable gold ( 10- 20%)

Have adequate health insurance from Indian company before returning permanently . Even though there is an employer provided mediclaim, it is advisable to have a self funded adequate health insurance cover when the current health status is good . If in later years there arises a diabetes , blood pressure or any illness or surgeries , the mediclaim policy taken after that will come mostly with 3 year waiting period for pre existing illness or exclusions for specific ailments. It is better to take it now when the health is at its best to enjoy a lifelong full coverage with full benefits.

You should ensure that your assets grow in value while you are there & offer the potential for income when you return . Your wealth should be available to use as needed and not a mere number that provides social acceptance.

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