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Financial Emergency Cannot be Predicted but can be Planned For.
In today’s day and age, investment planning has become important for people of all age groups. This is because of the evolution in the financial sector that has opened up doors to several opportunities. Whether it is a corporate professional or a business owner, an individual has the option of investing their hard-earned money in mutual funds, SIPs, equity, FDs, and the like. When we think about financial emergencies such as loss of business capital, sudden medical expenditures, damages to personal properties, etc., the first thing that anyone requires is a significant amount of money to face such a situation head-on. But it is also unrealistic to imagine that a large sum of money can be arranged very quickly.
Taking these factors into account, you should be checking out the best investment options available in the market. It is recommended to start your investment plan based on the age bracket you fall into. Be it systematic investment plans, equity saving schemes, or some other medium, here is how investment can be approached in different phases of life: -
People in their 20s
This is the time when most individuals are fresh out of college and getting to understand the world. The main focus of people in their 20s is to land a job that pays well. Besides this, they are keen on learning about investment planning. During this phase, the chances of paying off your education loan are high. But this also means that the risk appetite of the age bracket is pretty high. Be it post office savings schemes, mutual funds and SIPs, government bonds or life insurance policies, you can make multiple investment plans. The only thing to keep in mind is that you should make some form of investment during this phase as it will surely help you in the long run. It would be best to make short-term investments if you feel that the upcoming years of life might require financial backup.
People in their 30s
A lot of people experience a change in their priorities when they enter their 30s. While most people are already married and have children, others are planning to follow suit. So, this is the time of “settling down” in your adulthood. It is suggested that you look for equity-linked saving schemes during this phase. This will help you get high returns that can be used to fund your children’s education and other important financial needs. Along with this, tax-saving mutual funds investment plans should be prioritised as well. It is imperative that you build a strong portfolio by investing in reliable financial firms and companies. You can consult your colleagues, friend and family members about the best SIP and mutual funds in the market.
People in their 40s
This is the age group in which people are juggling a lot of responsibilities. From being a parent at home to heading a team in the office, the pressure is on! Since you do not have a single moment to waste in your 40s, it is best to look for an investment plan with high returns. It should be noted that your risk appetite is at a medium level during this phase, so you need to find mutual funds investment plans with a moderate amount of aggression. This is the right time to diversify your portfolio which includes equity-savings schemes, SIPs, mutual funds, PPFs, and FDs.
People in their 50s
If you have been investing for at least a decade, then this will be the best phase of your financial life. For people, who are still learning about investment planning, it is never too late to secure your future. You can apply the “100-age rule” while making your investment plan. According to this rule, you have to subtract your age from 100 and the answer you get is the percentage that should be made in risky investments like venture capital, cryptocurrency, hedge funds, and many more. The remaining percentage should go into equity-linked savings schemes, fixed deposits, etc. Hence, it would be wise to pay attention to asset allocation in the age.
Senior Citizens (65 years and above)
People fall in the category of senior citizens after reaching the age of 65. This is the time when your risk appetite is the lowest, so it is best to look for the best investment options provided by the government. You can do cash investments, mutual funds, and fixed deposits that are suitable for elderly people. During this phase of your life, your investment planning is focused on securing your retirement as well as the future of your family. If you have a secure portfolio, then having an additional source of income will be beneficial. For people who are new to investing, the right approach is to have cash exposure more than debt.
By taking these points into consideration, you will be able to make the right investments without facing any hassles.
Make your mutual fund investments easy with Muthoot Finance where you get access to professional fund managers, diversification as per your risk profile, flexibility to tweak your portfolio as per your investment goals, and liquidity. Visit the nearest Muthoot Finance branch to know more.