The word ‘DINK’ which stands for Double Income No Kids has become common in India. Typically, it refers to couples who have high income and no kids. These individuals have an advantage over other couples with children since their savings are quite high. However, there can be certain hitches if they don’t handle their finances well. Here are few useful tips for advisors who have DINK couples as their clients
- Assess the finances
As a financial advisor, the first thing you should do is have a detailed discussion with your client and his partner about their monthly earnings and expenditure. Evaluate carefully their savings, current investments and determine the amount of money needed to fulfil their monetary goals. DINK couples don’t have any additional expenses such as paying for their child’s education; therefore they might tend to go overboard with the spending. Advisors should create a budget for them to prevent any kind of excess outlay.
- Highlight the importance of insurance
There is a common perception among these couples that they don’t require insurance because both of them are self-sufficient financially. They tend to overlook the fact that in case anything happens to either of the partners, the earnings will decrease considerably leaving the other partner in huge debt. Advisors must encourage their DINK clients to buy adequate life and medical insurance to ensure financial security in the event of any unforeseen event.
- Create a suitable investment portfolio
Since DINK couples have more money at their disposal, they can use these funds to build wealth by investing in appropriate mix of asset categories. Financial experts should keep in mind that these clients have a high risk appetite; hence they have the ability to invest in products with higher returns. You must develop the right portfolio in line with their goals and risk profile.
- Plan for retirement
As a DINK couple approaches retirement, providing for medical costs, domestic help or aided living amenities must form a prime part of their plan. Financial advisors should calculate the corpus needed for retirement and ask such clients to begin saving accordingly so that they have adequate funds to live their golden years without any difficulty.