Research Study – Indians’ Life Goal Preparedness

One of my favorite things to start my week is catching up on the latest edition of ET Wealth every Monday morning. Last Monday I came across an interesting research study done by Bajaj Allianz about Indians and their preparedness when it comes to Life Goals. Considering a lot of life goals are really financial goals in disguise, it was right up my alley. While ET Wealth covered quite a bit of the detail in an infographic I knew there would be interesting content that I could get if I dug it out and Voila! Here we have a post thanks to the interesting study.

Methodology

The research used quantitative and qualitative measures to come up with their conclusions. The sample was pretty robust and well spread out over 13 cities in all four directions. Even when it comes to the age of respondents, they were evenly spaced out in a large range of 29-55.

Top 5 takeaways

While they covered quite a bit of ground, in my favored way, I will talk about the top 5 conclusions I took from the research.

1. Varied life goals

Considering the respondent spectrum was so varied, the life goals reflected that variation too. They range from providing for a child’s education to financial freedom in retirement to a good work-life balance to travel as well.

Essentially, when people think of life goals, it ends up covering a lot of aspirations. Call me a cynic, but having attended some market research myself, my belief is that a lot of these so-called “life goals” might include things that are really at the corners of the respondent’s mind. Only when deeply probed, sometimes people end up talking about a life goal per se on which they may not even act of delve much on.

So, I would rather discount vague goals like “lead a peaceful life” or “popular/recognized/famous” or even “buy a house by the beach”. Who amongst us hasn’t made such grand statements, especially when you think you are being judged? I would have rather tested the validity of those goals by asking them to list only those where they have done something beyond just wishful thinking

2. Retirement finally seems to feature in Life Goals

This to me was a happy conclusion from the study. The R-word seemed to feature pretty prominently when asked about life goals. Surprisingly, 42% of Millennials also considered retirement as one of their Life Goals. Not surprisingly, 56% of respondents in metros mentioned retirement whereas only 33% did so in non-metros. Maybe we need to do a better job of creating that awareness beyond the metros. Also, I wish there was a way to check with what people meant by “retiring rich” and “preparing for retirement”. Are people aware of their magic number which would be a safe amount for retirement? What is the route they are taking to get there? If they are thinking of early retirement, then how is that going to funded too?

3. Influencers of life goals

Conventional life goals like building or renovating a house or buying a fancy car or retirement are influenced by our direct peers with whom we are in touch, day in and day out. On the other hand, lifestyle goals like travel and fitness are fuelled more by social media and pop culture. While I understand how social media and pop culture might fuel the urge to travel, I was pleasantly surprised to see that a lot of people claimed it as their source of influence to focus on health and fitness. Who knew social media could have a positive impact on lives too.

4. Barriers to achieving goals

Now we come to the real meat of the study, at least in my books. There is a vast chasm between metros and non-metros in their stated likeliness to achieve life goals. Almost half the metro respondents at about 48% feel unsure of achieving their goals as compared to a much lower number of 29% in non-metros. When I thought of it, there could be a number of reasons. Maybe, the peer comparison and loftiness of goals is higher in metros. Another possibility is that the avenues to spend also remain much more for people living in metros. In that case, the probability of achieving longer-term financial goals may not always be cheery.

Another critical conclusion was that more than half, 53% of the respondents across the board believed they had not done sufficient financial planning. While that is a dismal number, I personally take solace from the fact that those many people are aware of and acknowledging this fact. To me, this is the first sign to understanding the need and even availing professional help when it comes to financial planning.

5. Investment options used

The last slide ended up reaffirming my pet peeve about Indians and investing. When asked about the preferred investment option, the most popular one remained Life Insurance. Even with the tag of tax-free returns, insurance is not equal to investment. We Indians are Bank Fixed Deposit or Cash deposit hugging creatures, a fact which comes out in this study as well. Bank FDs were an investment option preferred for a whopping 50% of the goals.

I am someone who likes to see the silver lining even if it is a figment of my imagination at times. For instance, mutual funds feature at number 3 in this discussion on investment options trumping over Gold and Real Estate. If that’s not a sign of the tide slightly turning, then I don’t know what is.

While the research addressed key questions and a very valid topic of life goals, I think there is a need to go into it deeper and understand better the psyche of Indians. Also, age and city may not be the only slices of data that make sense here.

Do you identify with any of the conclusions derived in the study? What are your life goals and how do you go about achieving them? Let me know in the comments below.

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