By Deepak Jasani
Start Saving Early. We’ve heard these are 3 words countless times before, and they hold true even today. But life seldom goes as planned, and often circumstances don’t allow us to start investing as early as we would have liked to. Fortunately, while investing for future goals, another mantra holds true as well, which is “better late than never.” If you’ve been delayed entering the world of investing, there are ways to make the most of the time you have on hand to secure your future and build a corpus for a comfortable post-retirement life. Here are some tips for you to consider.
Starting in Your 30s
While we understand that everyone’s circumstances are different, there are some common things that hold true for us all. Let’s assume that by your 30s, you have some years of professional experience, acquired valued skill sets, and have a more or less strong footing in your career. You might be in a mid-senior position and climbing the income ladder steadily. Considering that you are likely to retire by 60, you have a solid 25-27 years to build a good nest egg that can take care of your children’s education and marriage, foreign vacations for the family, owning a home and a new car, or even starting your own business. The key is to invest smart by diversifying your portfolio and then giving it time to grow.
Here are some ways to diversify your portfolio:
– Equities and mutual funds: Consider investing in equity funds like ELSS (Equity- Linked Savings Scheme), which offer higher return potential. ELSS are tax-saving mutual funds, in which you can invest through a single lump-sum payment or take the Systematic Investment Plan (SIP) route. However, these investments are riskier than fixed-income schemes like Bank deposits or PPF. Consider building a strong portfolio with 70%-80% holdings in stocks and mutual funds if you are looking for higher returns and can stomach market fluctuations.
– PPF: Public Provident Fund or PPF can offer you deductions of up to Rs 1.5 lakhs on your taxable income in a financial year under Section 80C. It yields taxfree interest income that keeps changing from quarter to quarter in a narrow band. It is a low- risk, sound strategy for the long-term horizon.
– Alternative fixed-income schemes: Many other investments can offer capital protection, low-interest income, and tax benefits like debt funds, tax-saving FDs, and more. It could be useful to have 20%-30% holding in debt instruments.
– Insurance: This is the right time to invest in appropriate life and health insurance, to provide your family financial …….