Today, standing on the sixty eight years of my life, when I look back to my days of youth I feel how difficult it was to invest then. I am happy now that there are ample opportunities now. As a young executive of the private sector we were on call for twenty four hours of the day. My wife was a teacher of a college. She was drawing a princely salary of Rs 225/- per month and I received Rs 650-/ per month, enough for two of us to maintain and save. We had of course lots of perquisite those days from house to car.
LOOK FOR INVESTMENT OPPORTUNITY:
But there was not much opportunity to invest. The nearest share
market was in existence in Kolkata only. There were no Mutual funds,
Public provident funds, ETF and Arbitrage Funds. We had chance to save
either in Bank Fixed Deposits and in Small Saving Schemes of post office
only. After our marriage (1966) we debated hotly whether Bonus paid
should be spent or be saved. After spending some money, the question
came where to save? Our obvious choice was to keep it in fixed deposit
of post office where interest was higher. Introduction of PPF in 1968
was big news for us. We started contributing to PPF at the rate of Rs
100 per month and slowly increased the contribution over the years. We
are still maintaining these two funds and those accounts are still
helping us immensely.
START SAVING FROM DAY ONE:
My sincere advice to newly wed couples would be to open immediately a
PPF account. It can be opened at public sectors Banks or in post
offices. If anyone can save Rs 3000/- per month (from his/her 24th
years) he or she would be able to get back Rs one crore seven lakh
thirty two thousand and five hundred sixty five only (1, 07, 32,565) on
his/her 59th years (calculating interest at 8% only). Of course, no
income tax needs to be paid. If you cannot afford then deposit only
RS.1500 per month. You surely would get at least Rs 53, 66,282.00. This
would be a great help during your post retirement age.
FINANCIAL PLANNING IS A MUST
The second advice to young couple is to start financial planning
just after the marriage. Sooner it is done happier you would be. If you
need to look after your parent think of their requirement also.
According to new Act passed by Parliament, children shall have to look
after the financial need of old parents having no income. It is a
mandatory requirement. The Courts have been empowered to punish children
incase old parents are neglected. So plan your financial life very
carefully. Fortunately there are ample avenues now days to invest and
plan. Newly wed should draw up a budget of all house hold expenses. Try
to manage household expense with own income. You can take loan only for
home construction before you buy your car. The value of car goes down
where as value of house multiplies. Holidays can be planned once in five
years initially. The interval could be reduced as you earn more. If you
are the only bread earner of the family take life insurance cover
early!
PLAN FOR CHILDRENS EDUCATION EARLY:
The first and foremost duty, after child birth, is to plan for
children’s education. Take a term Life Insurance if you cannot take
endowment or ULIP. Invest in Diversified mutual fund carefully for
education and daughter’s marriage. Discuss with a qualified investment
advisor before investing in any scheme.
THINK OF OWN FUTURE AT MIDAGE:
As soon as your children reach 19 years of age think of your own
future. How would like to plan your retirement? Invest in a good risk
-adjusted Balanced Fund. Don’t bother for post graduate education of
children over your retirement needs for now day’s children can take loan
for their higher education. One of our readers asked me, as to when can
he be a millionaire? My reply was: “by investing Rs 668 per month for
twenty year under SIP you can be a millionaire calculating a return at
15%.” Invest in good Mutual fund like Reliance growth, Magnum contra,
DSPML Equity HDFC top 200 etc. Discuss with a financial advisor and take
a calculated risk.