The one surprising fact about money is that we are all busy earning it but most of us hardly spare a fraction of the same time to manage it. Take a few seconds and think about it…. Whether it is investing in the right instruments, reviewing them, or documenting them, you’ll agree that you should be spending a bit more time than you currently do, to make sure you are managing your hard-earned money in the right manner.
If we spend a bit more time in managing our investments, our money will not only be invested smartly, it will also be useful when we really need it. Think of medical emergencies, buying a home, going on an international vacation, a wedding in the family and so on. Done wrong, we will struggle to make use of the money when we really need it.
In this post, I want to specifically talk about documenting your investments. This is one area that most of us really need to improve upon. I speak from personal experience and based on feedback from many people I know. Many of us have the feeling that investing our money is the only challenge we have. Once we have invested our money in the correct place, we feel we have done our job. This can be a very costly assumption. As the following examples show.
- As of March 2016, the total unclaimed amount from Mutual Funds was over Rs. 500 crores! It belonged to almost 14 lakh accounts. This includes unclaimed maturity amounts and dividends. It proves that there were lakhs of people who made the right decision about investing in mutual funds, but sadly, they were not able to claim the returns for some reason or the other. (In case you want to check if you have any unclaimed amount, please use this link.)
- The amount lying unclaimed with the Employee Provident Fund (EPF) is even bigger. It was Rs. 27,000 crore as on March 31, 2014. Again, this number proves that lakhs of employees had diligently saved for their retirement days. But those retirement funds which was supposed to take care of them and their families post their retirement/demise lay unclaimed with the EPFO. Imagine so many families being deprived of their rightful dues! (In case you have an unclaimed EPF amount, you can get in touch with the EPFO office through their Inoperative Account Help Desk section on their website to claim your dues.)
- This is the case with almost every investment option you can think of. Banks and post offices have thousands of crores of rupees unclaimed in their Savings and Fixed Deposits. Life insurance companies similarly have thousands of crores that have not been claimed even after the demise of the policyholders.
What’s happening here?
I feel the primary reason for the missing claimants should be a lack of documentation. Due to the lack of documentation, either the investor forgot about the investments they made or their loved ones/survivors were unable to trace the investments after the demise of the investor. A sad end to all the money earned, saved and invested! There could be other reasons too. But in every case, if the investment details were documented, either the investor or their family members would be able to contact the bank or institution and begin the claim process. Without any documents to indicate that an investment was made, your or your dependants would not even be aware that there is money left to claim!
If you do not want your investments to meet the same fate, you should take action as soon as possible. If you were not in the habit of documenting your investments immediately after investing, it’s time you took stock of it now.
The whole task should not take a few hours at the most.Collecting all receipts, confirmation emails, and your bank statement for the past few years should be the first step. Once this is done, open an Excel sheet and start entering the details of all your investments. This can be done at the end of a working day or on a holiday. For most investors, the task shouldn’t take more than a few hours.
I’ve created an Excel sheet that you could use as a reference. You can use the same template, modify it or create an entirely new one based on your needs. Just remember that the document should contain all the necessary details that will help you or your nominees collect the money at a later date. Once you’ve created the document, you can save it online or on your PC. Take a few printouts and save it with all your other investment documents or hand it over to your spouse, children or parents. Then make sure you update it every six months. You can also save each update as a new file in case you want to record the sequence of your investments and withdrawals. This exercise should be more than enough to ensure that your hard-earned money doesn’t add to the huge pile of unclaimed money.
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Win a Free Copy of My Book
I hope you’ll not forget to take action after reading this. Many a time, we have the right intentions but something or the other comes up and we forget to take action. I hope it doesn’t happen in this case. As an incentive for readers who actually execute this plan, I would like to offer a Free Copy of my book to the best 5 documentation efforts. To win, simply complete the documentation in an Excel or Word sheet and email it to me at firstname.lastname@example.org. Please make sure you delete all Account Numbers, Login & Passwords and other sensitive information. Documents that improve on the basic structure I provided will have a better chance of winning.
This offer is open from Dec 1 to Dec 31, 2017. Winners will be announced in the first week of January.
I hope these 5 books will not go unclaimed 🙂