1. Investing, like most other activities in life, should be primarily based on your own needs/goals.
2. Identify whether your primary need, at any point of time in your life, is income or growth, as this essential classification helps you choose/maintain your assets.
3. When you are young and are beginning to earn, your need for income is higher for events like buying/ upgrading a vehicle, job risks and higher education, which require income-generating assets like bank deposits and debt funds, that can be liquidated without losses at short notice.
4. During this period, your investment in growth assets, such as equity mutual funds, should be proportionately smaller with a flexible contribution.
5. Avoid buying property during this phase unless you have a stable job and a high net surplus income to comfortably pay the home loan EMIs.
6. As you settle down in your career, your ability to increase your investment in growth assets increases, along with additional expenses like your marriage and holidays, and then bringing up your children, their education and marriage.
7. You should, therefore, increase your equity funds portfolio, through long-term SIPs, as sticking only to safe assets like fixed deposits, PPF, etc. will nullify the long-term growth and capital appreciation that your investments can enjoy during this phase of your life.
8. When your investing horizon is 15-20 years before you retire, you can also buy your first home, with the prime objective of residing in it and not for rental or investment purposes.
9. As you near retirement, your income needs will return and you should slowly reduce the growth assets and move towards income assets, to supplement your income after retirement.
10. By the time you retire, ensure that :-
a) You should be living in your own home, without debt.
b) You should have a corpus set aside to grow in balanced equity funds for another 25 years into retirement.
c) The rest of the money should be in such assets (debt or equity) that deliver regular income, preferably through SWPs.
11. A smart investor builds wealth over a span of 35 years, from the age of 25-60 years, draws down from it and finally gives it away in the next 30 years.
12. The core task of need-based investing means keeping the focus on yourself, your income, your savings, your investments and your needs/goals.
2. Identify whether your primary need, at any point of time in your life, is income or growth, as this essential classification helps you choose/maintain your assets.
3. When you are young and are beginning to earn, your need for income is higher for events like buying/ upgrading a vehicle, job risks and higher education, which require income-generating assets like bank deposits and debt funds, that can be liquidated without losses at short notice.
4. During this period, your investment in growth assets, such as equity mutual funds, should be proportionately smaller with a flexible contribution.
5. Avoid buying property during this phase unless you have a stable job and a high net surplus income to comfortably pay the home loan EMIs.
6. As you settle down in your career, your ability to increase your investment in growth assets increases, along with additional expenses like your marriage and holidays, and then bringing up your children, their education and marriage.
7. You should, therefore, increase your equity funds portfolio, through long-term SIPs, as sticking only to safe assets like fixed deposits, PPF, etc. will nullify the long-term growth and capital appreciation that your investments can enjoy during this phase of your life.
8. When your investing horizon is 15-20 years before you retire, you can also buy your first home, with the prime objective of residing in it and not for rental or investment purposes.
9. As you near retirement, your income needs will return and you should slowly reduce the growth assets and move towards income assets, to supplement your income after retirement.
10. By the time you retire, ensure that :-
a) You should be living in your own home, without debt.
b) You should have a corpus set aside to grow in balanced equity funds for another 25 years into retirement.
c) The rest of the money should be in such assets (debt or equity) that deliver regular income, preferably through SWPs.
11. A smart investor builds wealth over a span of 35 years, from the age of 25-60 years, draws down from it and finally gives it away in the next 30 years.
12. The core task of need-based investing means keeping the focus on yourself, your income, your savings, your investments and your needs/goals.