An easy-to-browse ready reckoner for everyone, with lots of easy tips
IS JUST RUPEES 1000 TODAY SUFFICIENT FOR RETIREMENT?
1. Firstly, I consider Fixed Deposits and Debt funds as savings, and not investments, because:-
a) Saving is about setting aside money for use in the short term put in a cash management account or term deposit with very little risk, and has limited growth potential.
b) Investing, on the other hand, is about putting away money for the medium to long term, involves a measured degree of risk with the aim of growing your wealth and usually involves creating a plan (investment strategy) to achieve your financial goals.
2. One should not expect "returns" from such "fixed income" products as they are primarily for capital protection.
3. Returns on "investments" will always be linked with some risks as "no risk is no gain".
4. The key to very long-term wealth creation is the NET SURPLUS SAVING which a young earner is able to deploy systematically, preferably for use during life's end stage or for bequeathing, AFTER allocating his monthly earnings for meeting ALL his regular expenses and liabilities, and after allocating towards investments made for fulfilling other needs, wants and goals.
5. A back-of-the-envelope calculation shows that an investment of just Rs.1,000 per week, by a 30-year young earner, out of his NET SURPLUS SAVING , into a weekly Systematic Investment Plan (SIP) of a balanced fund, during his 30 years of earning life, will give him a weekly Systematic Withdrawal Plan (SWP) of Rs.22,000 from it for the next 30 years of his retired life.
That's what I would term as "safe investment returns" through the "power of compounding" - and any time is good for long-term SIP investment - by which a 30-year young earner can build a healthy retirement plan.
a) Saving is about setting aside money for use in the short term put in a cash management account or term deposit with very little risk, and has limited growth potential.
b) Investing, on the other hand, is about putting away money for the medium to long term, involves a measured degree of risk with the aim of growing your wealth and usually involves creating a plan (investment strategy) to achieve your financial goals.
2. One should not expect "returns" from such "fixed income" products as they are primarily for capital protection.
3. Returns on "investments" will always be linked with some risks as "no risk is no gain".
4. The key to very long-term wealth creation is the NET SURPLUS SAVING which a young earner is able to deploy systematically, preferably for use during life's end stage or for bequeathing, AFTER allocating his monthly earnings for meeting ALL his regular expenses and liabilities, and after allocating towards investments made for fulfilling other needs, wants and goals.
5. A back-of-the-envelope calculation shows that an investment of just Rs.1,000 per week, by a 30-year young earner, out of his NET SURPLUS SAVING , into a weekly Systematic Investment Plan (SIP) of a balanced fund, during his 30 years of earning life, will give him a weekly Systematic Withdrawal Plan (SWP) of Rs.22,000 from it for the next 30 years of his retired life.
That's what I would term as "safe investment returns" through the "power of compounding" - and any time is good for long-term SIP investment - by which a 30-year young earner can build a healthy retirement plan.