SIP, F&O, Shares, Insurance Policies or FD where to invest ?, not an easy decision. Well, it’s not easy to ask anyone too. Whoever you ask will sing the praises of the plan he had, and then the daily calls start, which means another headache. First to work hard to earn money, and then think hard about what to do with that money. Now see, if you want to invest in property, then there is a recession in real estate, if you keep money in the bank, the bank had frauds & your money lost, if you put it in the stock market, the market collapses, if you keep it in the house without doing anything, then the government bans notes, then what should the common man do?
Financial awareness is the biggest problem of the common man. Doctors, Engineers, Lawyers, etc., who have the ability to make money, have the same problem, but these people can remove the darkness of awareness with the spark of money. The common man always became victim of the false promises of investment advertisements, earlier such advertisements were being bombarded by the news media, now it has exploded due to social media. So the common man needs money mantras, all these efforts to provide it.
When planning our money, the most important thing is to look to the future, that is, to think about decades instead of years, to estimate the income and expenses of the family for the next ten years, and then to divide the short-term and long-term investments. Of course, this is our plan for the next 10 years, but everyone confused how much money to start with. Let us assume that your monthly income is Rs. 1 lakh and household expenses and loan instalments together are Rs. 60,000, which means that you save Rs. 40,000 per month. Now let’s plan where to invest this money so that the returns are good and it can be withdrawn quickly in case of emergency. Remember, we have already planned the investment with decades in mind, now we just want to start it, but will we put the full Rs. 40,000 in it? Not at all! Always remember that any investment made without health insurance and term plan will not be succeeded; always remember that if these two things are not there and if there is a medical emergency, then the first wound will fall on your investment, right?
1) Health Insurance (Mediclaim) – Mediclaim should always be started at a young age and should also belong to the whole family. Many people think that I am young, then why to expend for Mediclaim, I will take it after forty. Today, you are at young age and you do not have any diseases, so you will get very high sum assured at a very low premium, there is a waiting period of a few years for critical diseases, so that the claim not available immediately, will also go away and when you really need it, the mediclaim will work for you. Some people take very low sum assured to save premiums, now just think that we take mediclaims for major illnesses, and these days, consider the increasing cost of the hospitals, ask yourself whether the policy you have taken will actually be enough, otherwise there can be situation to pay the premiums on the one hand and on the other hand you have to pay half the cost of the hospital. So the mantra of mediclaim is to take in the right age, the right amount and from the right company.
2) Term Insurance – Always remember that term insurance is not an investment but a form of insurance. Don’t get victim of the increased advertising these days for Cashback, Child, retirement plans, those may sounds attractive but they neither serve the purpose of insurance nor investment, just like an all-rounder player in the team but not expert in either of the skill so always be outside the team. Remember that the main purpose of taking out term insurance is to sustain the dream you have dreamed of and the investment you have made to make it a reality, your family not required to withdraw your investment for livelihood after you. When choosing insurance, choose maximum possible on your income, if you start at a young age, there is a very low premium and it stays the same for the rest of your life, so take it on time and take the maximum. Term insurance compensates for the financial impact that the family will suffer due to the loss of the earning person, so consider the earning age and take insurance only up to that, otherwise do not waste your money there because someone is saying that we can insure you up to the age of 100. The important thing is that term plans are very long-term, so the choice of company is very important, otherwise your company should not be settled before you. So the mantra of term plan is to take a term plan at a young age, maximum amount, for the right period and from a sustainable company.
These two things are not part of investments, so if we reduce our 40,000 to 10,000 together, we can consider the remaining 30,000 for investment. Now how much is in the short term and how much in the long term can be easily divided according to what we have already decided. When we meet again, we will discuss what options are available between the two and how to choose them after considering our age, risk carrying capacity, liquidity, market risk, etc.
