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We go places to earn better and improve our lifestyle. Young Indiandiaspora who work on projects and employment abroad are growing, thanks to globalization. Professionals are making pretty decent income over there. When it comes to personal financial management, how do they really fare? NRI category is the most exploited lot of Investors. Let us see few common financial mistakes of NRIs.

Under Insurance:

NRIs miss out big time protecting; lives, health, assets of self and dependents. We come across many cases where NRIs pay through their nose for medical emergency/care. You should have floater health cover exceeding 10Lacs. Whatever little life insurance they have may be because of their so called Insurance cum Investment, Unit Linked Insurance Plans (ULIPs). Facts and figures point out, rampant recycling (Surrendering old ULIPs for New ULIPs) of insurance products. What you need is pure term insurance to cover your life. Protection is most important factor in financial planning of NRIs, if you wish to settle back (Repatriate) in India sooner or later.

Impulsive and Obligatory Investments:

Just think how many days you used that car you purchased last time when you visited India? What is the status of your investment in Art funds, real estate, and alternative investments? NRIs, particularly professionals are chased down by all financial intermediaries like banks, real estate developers, insurance/MF agents, share brokers with Exclusive offer, Unique opportunities and/or fabulous offers. Some people ask business as an obligation. Obviously salesmen win. They dump things which pay them most.Do your homework before making any decision. Your decisions should be based on real facts and analysis rather than risky, speculative predictions. Going with popular opinion and the crowd can't be a research. This is root cause for regrettable investment decisions.Understand your risk profile and take informed decisions. It's a fad now pumping money into start-ups, where chance of losing 100% money is higher. Go with simpler and cost efficient solutions not products. Never enter speculative investments. "October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February." ― Mark Twain, Pudd'nhead Wilson

No Diversification:

NRI's tend to invest heavily in physical assets like real estate and gold. There are no or lesser financial assets to fall back on. Real estates are highly ill-liquid and tax inefficient. Ask yourself, are you still getting those assured and lucrative rental incomes? Why always invest in a lump sum when you visit India? Start some recurring investments in financial assets as well. Remember any asset class is cyclical.

Borrowing overseas to invest in India:

Borrowing to invest is a high risk investment strategy. NRIs think it's smarter to borrow at lower interest in abroad (@ 1-3% p.a) and invest in India @ 7-9% FD, is a sure shot way to make big profit.Huge currency involved.Scores of people tried and lost big time because of adverse moment of currencies. If you lose capital in Indian investment, imagine the big blow.

There are other costs also involved like, Cost of currency conversion, Management fees and Taxes.

Not monitoring and reviewing:

NRIs say pulling out their financial data is tougher job. They feel proud about having vague answer. It's advisable to have online access of service providers and pull out softcopy of statements and reports. You can digitalise and store the scanned copies of documents.You can easily monitor all your financial assets easily in a single place/tool for a small fee. Unless you monitor, you can't take any corrective measures, if needed. A wise investment yesterday may not be wise today and today's wise decision may not hold well forever. It's crucial to evaluate your portfolio periodically.

Not having Will:

When a person dies without having made a Will, he is said to have died intestate. If a person dies without making a will, his property will be inherited by his legal heirs according to the inheritance Laws applicable (Varies Based on Religion, Sex, Relationship hierarchy etc.).

Dying without will

could play havoc among family members. In the absence of a WILL unscrupulous persons or members might take advantage and abuse your estate. Overseas assets come with different issues. You should identify and clearly mention guardian to avoid many problems.

Unplanned Relocation:

Unlike past, moving back to India with sizeable assets is dream to many NRI now. Relocation is a big decision. Some wish to turn entrepreneurs to explore the new opportunities in India. Few returned people revisit their decision. Relocation should be treated as another financial goal such as education and retirement. NRI from UK who is relocating from UK for good can move pension funds from UK through Qualified Recognized Overseas Pension Scheme (QROPS). This helps them minimize taxes to a greater extend and maximize returns. Professionals like doctors can benefit a lot Common mistake List goes lengthier; lack of planning, investing on someone else's name, not changing bank account type, signing as collateral, undocumented loan to friends and relatives etc.