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If you are related to financial field, you have already heard that on 1-Apr, if not well it’s beginning of new financial year. I know it’s really a bad joke to begin when I want to deliver a very serious message. Key reason behind me writing to you is, to make this world a better place in my own way, I know there is always a NGO to whom we can write a cheque and get it done. But after doing it, I wasn’t satisfied hence have been trying out new way of giving back to society in my own way. My education & job background is heavily related to finance – stock market to be more specific, hence I thought of helping through that. Below is the key advice, that I have garnered through own & others experience over period of time. (This advice is for age group of 25-40)

Don’t think about stock market investment till you have done below enlisted steps

  • Insurance is for your family not for you, so buy term policy and think of how much money your family will get if you die – stop thinking, what if I survive, I don’t get anything, this is bad deal, remember insurance is for your FAMILY not for YOU. Also don’t buy insurance just for saving tax. (What this also means is bye bye to all those LIC schemes which returns you money with some bonus after 20/30/40 yrs – returns are in line with saving account. Only say YES to term plan.
  • Buy a good mediclaim at least worth 4-5 lakh per person, if its family of 4/6 well multiple that by amount by 4/6. If you have a corporate mediclaim buy that and make sure everyone is covered there.
  • If you have senior citizen parents that are not covered, go to PNB or Bank or Bank of Baroda they have cheap senior citizen plan – rest all are very very expensive, choice is yours.
  • Emergency fund – Now keep 6 months worth of expenses in cash or saving account or liquid fund or unused credit card for emergency – don’t touch this for anything that is not emergency.
  • If you have outstanding loan, first pay that off or plan for that before doing anything else.
  • Now start a SIP for your retirement – equity MF is best.
  • Also start SIP for college education for your kid (some may start this before earlier one, choice is yours).
  • Start SIP for holidays include your long weekend picnics too.
  • SIP for 4/5 yearly car upgrade.
  • Now if you are left with any money go ahead and come to stock market.

This is the most important message that I want drive home to everybody, I have noticed many of husbands either don’t tell their wife/family about financial investment/assets or wife/family didn’t bother asking (in few instances vice versa also). It’s advisable to make a list and share it, so in worst case scenario s/he is aware about it and manage rest of the life peacefully.

I am not an insurance agent or a financial advisor/planner nor do I give stock market tips.

If you think above outlined plan is too much for you, hire a financial advisor whose interests are align with your goals and not his commission.

Good luck and Happy New Year

 

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