Typical Problems of Armed Forces Officers which hamper a good financial planning and investment for them:-
- Postings to remote locations – very difficult to get any reasonable financial advice. At the best, an insurance agent may be the only available financial advisor, with no idea of the concept of financial plan and maybe, with his own axe to grind. There would most probably be no internet, the newspaper would reach 2-7 days late (if at all) and mobiles/telephone may work erratically.
- Frequent Dislocations – generally the postings of Army and Air Force officers take place every 2 to 3 years, thus seriously disrupting any continuity of financial planning for long-term goals. That way Navy officers are better off but dislocations hurt them too in a similar manner.
- Nature of the Job – Armed Forces job is a 24X7 career. At times, one may get a comfortable posting with limited hours of work but for majority of officers, especially younger officers who actually need to plan for their life ahead, the demands of the career may see them relegate financial planning to the lowest notch of their ‘To Do’ list. Add to that the lack of ‘financial motivation’ in their society, poor communications (telephones, internet etc) and the rigours of the job.
- Lack of Financial Knowledge in the Armed Forces Community – Discussions on personal finances is not considered in ‘good taste’ and the concerned person is considered to be too ‘money minded’. Hence, there is no financial knowledge as a community. Though the younger officers are more financially aware, many of them tend to go to the extreme and end up doing daily stock trading rather than purposeful wealth creation.
- Exposure to Considerably more risk to life – this consideration tends to make them take to safer alternatives like Provident Fund, bank and Post Office FDs, etc which are easily available but do not give positive tax-inflation adjusted returns. They fail to realise that such options should be taken only for a small amount of money – it is not uncommon to come across officers with Rs 25-30 Lakhs in their Provident Fund.
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