Today there was this small class taken by a senior on how to manage your personal finance and investments. It becomes all the more crucial when you are in public sector and that too with the already diminishing hopes from 7th Pay commission. Thought would have them on the blog, can benefit some like me! :)
1. We must go for term insurance with a cover of roughly 10 times our annual salary. This is a hardcore insurance tool which does not give you back anything at maturity but the coverage is immense for a small premium.
2. Prefer not to go for the hybrids which give you a mix of insurance and investment. They have low risk but the coverage also is pretty low.
3. Investing in equity- Only invest when you have time to spare to understand the system; or if you have a thing for it; Prefer investing in A Grade stock; Long term and limited indulgence;
4. Mutual Funds - Systematic Investment Plans are the best best; Go for balanced and equity funds for long term; Index funds can be a good option with low risk;
5. Roughly 10% of your portfolio can have Gold ETFs so as to balance your equity investment.
6. Covering all dimensions, it is still advisable to invest in land than in House property. But do take caution with the title and rights of the land.
7. Priority for tax oriented investment: Contributory Pension Fund > Insurance> ELSS mutual fund> PPF> Housing loans.
8. Principle of PAY YOURSELF FIRST - as the salary comes, first send the due part to the investments and then think of spending!
9. Some Books which can help : "Rich Dad Poor Dad" ( 4 book series ) and for funda on equity "Value Investing" &" Beating the streets".
1. We must go for term insurance with a cover of roughly 10 times our annual salary. This is a hardcore insurance tool which does not give you back anything at maturity but the coverage is immense for a small premium.
2. Prefer not to go for the hybrids which give you a mix of insurance and investment. They have low risk but the coverage also is pretty low.
3. Investing in equity- Only invest when you have time to spare to understand the system; or if you have a thing for it; Prefer investing in A Grade stock; Long term and limited indulgence;
4. Mutual Funds - Systematic Investment Plans are the best best; Go for balanced and equity funds for long term; Index funds can be a good option with low risk;
5. Roughly 10% of your portfolio can have Gold ETFs so as to balance your equity investment.
6. Covering all dimensions, it is still advisable to invest in land than in House property. But do take caution with the title and rights of the land.
7. Priority for tax oriented investment: Contributory Pension Fund > Insurance> ELSS mutual fund> PPF> Housing loans.
8. Principle of PAY YOURSELF FIRST - as the salary comes, first send the due part to the investments and then think of spending!
9. Some Books which can help : "Rich Dad Poor Dad" ( 4 book series ) and for funda on equity "Value Investing" &" Beating the streets".
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