It
was raining money in the streets of Kuwait earlier this year. Don’t we all wish
that we’d been driving by at this wonderful time (so much better than the
raining spiders in Australia).
Unfortunately, while you keep
wishing for raining money, you need to make sure that you’re prepared, just in
case. The best way is to get your best
investment plan settled and here’s how you go about them.
Young adults in their 20s
Twenties is the ideal time for
entering the investment world. It is the best time to get all insurance covers
at the lowest rates and get that magic of compounding working on even small
investments.
You are free from major
responsibilities and have more time and energy to learn about the financial
markets. So, it is the best time to try your hand at maximum equity exposure,
for higher returns. Ideally, one can even go with 90% equity exposure at this
time.
With the entry of a new breed of
youngsters with high disposable incomes, the home purchasing age of Indians has
also come down to the 20s now.
Products recommended: ELSS, Long term SIPs, bonds, ULIPs, Stocks, ELSS, Term Plan,
Health Insurance
The mature-young of the 30s
Having entered the 30s, your
finances are starting to look serious. You expenses are growing; with a home loan and car loan. Your salary too has
grown. So, if you haven’t gotten your finances in order by now, it’s time
to buckle down.
Consider your expenses, short
terms goals, and envision your retirement. You can allocate a certain
percentage your salary for all fixed liabilities, including loans and
investments. Ideally, that can take up 60% of your income, so that you can
breathe easy.
This is a good time to cement a
solid foundation for your portfolio. Investments at this time should be
regular, systematic and adequate to reach your goals.
The Quadragenarians (40s)
Your priorities are a longer list
now. Besides retirement planning, your children’s education has now been added
to your expenses. A dilemma faced by people at this stage is balancing their
investments for varied requirements.
Close all unwanted loans by now.
Bring down your home loan by part payment, so that you can concentrate on your
investments alone. Review your portfolio to understand where you are standing.
Products recommended: PPF, pension plans, ELSS,
Fixed Deposits, KVP, ELSS, MFs, ELSS
Nearing Retirement (50s)
Your investment tenure is getting
shorter now and you’re looking at some big ticket spending like children’s
college education, marriage etc.. If your income comfortably outpaces your
spending now, you are safe. But if there is a potential shortfall, you should
start aggressively planning.
Some people would want to gather
a corpus at this time for investing in retirement communities.
Products recommended: Debt funds, FDs, Liquid Funds, ELSS, NSC, Short term FDs
The Retirees (60s)
Many would think that an best
investment plan is not necessary after retirement, but this is a critical
stage of your life where you should have perfect control over your finances.
You may have too many unplanned expenses at this stage.
You will have some money in hand
through gratuity amounts, matured insurance policies etc. So, you need to
channelize them to make them best use of them and to save tax.
Invest in short term plans and
ensure that you have high liquidity with your investments for meeting possible financial
emergencies and miscellaneous expenses.
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