Skip to main content

Goal based planning is key to financial success

Risk profile, financial goals should decide investment options THE risk profile and the asset allocation are the two major planks on which the investment should be structured

FINANCIAL needs vary from individual to individual and depend on one's age, lifestyle, risk appetite, future goals, family structure and income. Focusing on future financial needs is even more crucial because of their uncertain nature.

Age remains the best differentiator between two investors and it is easier to understand the needs as one passes through various phases of life.

Risk profile and asset allocation are two major planks on which one should structure investment.

If you are a young adult who has just started career after formal education, then chances are that you would spend a lot on your lifestyle and personal expenses like movies, clothing, fuel and dining.

This behaviour may impact your savings habit. As the time value of money is ever decreasing and inflation is expected to be high, it is always advisable to start saving early in one's life.

Most investors forget the fact that saving is a necessity and must be practised by individuals as no one ever has gone bankrupt in his/her life because of the habit of saving.

Although at an young age one may not have many dependents, but you still may have old parents to look after. It is also possible that you are living with your family and do not have the burden of rent or home loan. At this age, investments must be directed towards funds for unforeseen events such as a disability or critical illness.

Apart from that, if you start planning for retirement at this age, you would be able to accumulate substantial corpus at the time of retirement without any stress in the following years. The need is also highlighted by the fact that life expectancy of individuals at retirement is rising constantly. This means that you need to save much more to sustain yourself in old age.

As age increases, responsibilities also rise, usually so does the income, outlook towards life changes and the tendency to save and invest takes priority. Supposing you are between 28 40 years, the family structure will have a different shape with wife and, perhaps, one or two kids.

Although you might be clear about your financial needs and the options available to fulfill those needs, you will still need to be cautious not to make any mistake like opting for a low yield investment option or taking an insurance policy, which does not fulfill your purpose.

At this age, your priorities should be to save funds for emergency, which can be used in case of a job loss or treatment of any family member. Basically, this fund should be sufficient to support the family for six to eight months.

In case you have taken any debt or long-term loan, then planning for repayment of that loan is crucial. It is better to develop a strategy well in advance to repay a home loan, personal loan and any commercial loan keeping in mind the possibility of death of the earning member in the family.

Child's higher education is another event which may cost you substantial amount of money. If you belong to an even higher age bracket, say 4155 years, then your focus should be on investing in financial instruments, which will keep your investment safe and at the same time generate income after retirement.

Since the investment horizon is not too long at this age, a more conservative approach is advisable while making investment decisions.

If you are approaching retirement, then the financial burdens will take a different shape and demand for regular income will take precedence.

The need for assured streams of income for the surviving spouse should also be kept in mind.

Final expenses are another critical aspect, which arises in the final days of any family member.

This may also involve the expenses for treatment of any terminal illness, expense on final rites and certain typical expenses that are present in almost every religion.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver Mutual  Funds  Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

 

Popular posts from this blog

Liquidity Adjustment Facility

Liquidity adjustment facility (LAF) is a money market tool used by the central bank of a country (in India it is the Reserve Bank of India ), to infuse funds into the country's banking system when liquidity dries up. Again, in case there is excess liquidity, the central bank uses some tools to help banks manage their surplus liquidity. Usually the RBI uses the repurchase facility (called Repo ) to give short-term loans to banks to meet their temporary liquidity shortage. On the other, hand RBI uses reverse repo facility to help banks park their excess liquidity with it. Banks usually use various securities, which are approved by the RBI, as collateral when they take money from the RBI to meet their short term liquidity requirement     Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara...

Jeevan Labh

 The Life Insurance Corporation of India has announced Jeevan Labh , its limited-premium, with-profits endowment plan .   It comes with a premium paying terms of 10, 15 and 16 years for corresponding policy tenures of 16, 21, and 25 years respectively. ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further information contact Prajna Capital on 94 83...

BHIM App

What is BHIM? BHIM stands for Bharat Interface for Money , which is an easy way of transferring money from one bank account to an other via a smartphone using the Unified Payments Interface (UPI) platform . It is an instant payments application meant for sending money as well as requesting for payments. How is it different from UPI? BHIM is no different than UPI. But in the case of BHIM, customers don't have to download mobile applications of multiple banks, instead a single BHIM app downloaded from Android Play Store is sufficient. Other than that, payments can be made through a virtual payments ID or through account number and IFS code, same as UPI. What you need to use BHIM? BHIM can be used across an droid smartphones with version 4.0 and above, also it will be made available on iPhones and Windows smartphones very soon. Further, for feature phone users they need to use the USSD feature by dial ing *99#. Why was the need for BHIM felt when UPI is already in place? With various...

NPS for Tax Saving

The NPS is a great way to save tax if you don't mind locking in your money till you retire. Till last year, the taxability of the NPS was a big issue. But last year's Budget changed the rules and made 40% of the corpus tax free. The PFRDA wants that the balance 60% to be exempt from tax as well. The emphasis is on increasing pension coverage. So, allowing EEE status (to NPS ) is our major demand (in the Budget NPS is especially useful for investors who may have exhausted the `1.5 lakh investment limit under Section 80C but want to save more.   Another way the NPS can cut tax is by rejigging the salary.If a company deposits up to 10% of the basic salary of an employee in the NPS under Section 80CCD(2d), the amount will be tax free. Turn to page 28 to see how much tax this can save. However, the take-home pay of the employee will come down. Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 10 Tax...

Bajaj Allianz Health Guard policy

Bajaj Allianz General Insurance has redesigned its ` Health Guard' policy with new features. It now includes extended policy term of up to 3 years, new definition of family under a single policy and reinstatement of sum insured for same disease in the policy period. Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 10 Tax Saver Mutual Funds for 2017 - 2018 Best 10 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. ICICI Prudential Long Term Equity Fund 5. Birla Sun Life Tax Relief 96 6. Franklin India TaxShield  7. Reliance Tax Saver (ELSS) Fund 8. BNP Paribas Long Term Equity Fund 9. Axis Tax Saver Fund 10. Birla Sun Life Tax Plan Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information cont...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now