March 11: The 30s are a wondrous decade in one’s life. The turbulent 20s are a thing of the past and the fabulous 40s are still a few years away. This is the decade to consolidate one’s position in terms of personal and professional success. You must plan and safeguard your family’s future interests with the steps you take today.
But most people are daunted by the idea of making investments (and possibly losing money to them) or taking missteps and jeopardising their own and their loved ones’ future. However, nothing good was ever accomplished by looking over one’s shoulder. Unless you take the plunge, you cannot hope to achieve at least some measure of financial success.
The good news is, it’s not that tough to do if you are methodical and careful in your approach. If you are unaware of how to go about it, a discussion with an experienced investments advisor can give the required clarity.
We present a simple stepwise guide for investing in your 30s:
* Create a detailed list of financial goals.
Nothing was ever achieved without a plan, and this holds true in the case of your wealth creation goals as well. It is not enough to have an ambiguous idea that you want X amount of money in the bank in the future – you must work towards it with a structured plan in place. Start by listing your financial goals, both short- and long-term, and the amount of money required to check that goal off the list. This exercise gives direction to your roadmap, and you can start looking for the best options to make these dreams come true.
* Research the best investment options for your goals.
Now that you have a roadmap of goals and associated costs, you can start researching the best investment options to meet those objectives. A bevy of options are open to you, based on the scope of the goal and the projected timeline. From mutual funds to PPF, and from gold bonds to liquid funds, you can invest in a variety of investments that are most suitable for your needs. If you are confused about which options to pick, an investments advisor can help you pick the best ones after discussing your goals with you. If you are looking to meet short term goals, you can invest in RD (Recurring Deposit), five-year tax saving FD (Fixed Deposit) and balanced funds.
* Look for suitable long-term options for long term needs.
Long term goals are best met with online mutual funds – equities and debt mutual funds in India can help you accrue a high corpus for the future, depending on the amount of money invested and the vesting period. Do use online calculators for mutual fund calculation so that you can be certain about which ones to pick. Meanwhile, other long term investment options to check out are PPF (Public Provident Fund), pension funds and NSC (National Savings Certificate).
* Start planning for your retirement.
You are currently in your 30s and it seems like you have a long working life ahead of you – and you do. However, it is never too soon to plan for your retirement. Leaving retirement planning for later is detrimental to your interests in the senior years – once you retire, your income stops but your expenses continue unabated and indeed, they increase because you have several medical issues to contend with. Without a retirement plan in place, you could be staring at financial uncertainty in your senior citizen years. The more time you give to your retirement planning, the bigger the harvest – invest in the right pension plans so that you can enjoy the benefits of a large retirement corpus when needed. We also recommend taking a term life insurance plan and name your spouse as its nominee, as part of your retirement plan. A separate health insurance plan for your spouse is also a good investment.
* Buy adequate insurance.
Despite the uncertainty of life, most people hesitate to buy life and health insurance policies, dismissing them as a needless expense. Both life and health insurance policies safeguard your income from unpredictable events. They also protect the interests of your loved ones in your absence – if you are unable to work or are absent, so is your income. Your family depends on your income and the family savings to tide over expenses like household maintenance, children’s education, medical expenses, bill payments, etc. The insurance pay-outs can help the household run in your absence, at least for some time. Do invest in term life insurance plans (with a minimum sum assured of Rs 1 crore) and a comprehensive family health insurance with a COVID protection component.