I am 31,didnt have any savings uptill now .planning to save 20 k per month..suggest me the diversified savings options for future....
Ans: Congratulations on taking the first step towards securing your financial future! At 31, you're entering a crucial phase where strategic savings can pave the way for a prosperous tomorrow. Let's explore diversified savings options tailored to your aspirations and financial goals.
Commendable Initiative
I must commend your decision to start saving at this stage. It's never too late to begin your savings journey, and your commitment to setting aside ?20,000 per month demonstrates a commendable dedication to building a secure financial foundation.
Understanding Your Goals
Before diving into savings options, let's understand your financial objectives and aspirations. Whether it's building an emergency fund, planning for retirement, or achieving long-term wealth accumulation, your goals will shape our savings strategy.
Exploring Diversified Savings Options
Diversification is key to mitigating risk and optimizing returns. Here are some diversified savings options to consider:
Systematic Investment Plans (SIPs): SIPs offer a disciplined approach to investing in mutual funds, allowing you to invest small amounts regularly. By diversifying across equity, debt, and hybrid funds, you can tailor your portfolio to your risk tolerance and investment horizon.
Public Provident Fund (PPF): PPF is a popular long-term savings instrument offering tax benefits and attractive interest rates. By contributing to PPF, you can build a tax-efficient retirement corpus while enjoying the security of a government-backed scheme.
Employee Provident Fund (EPF): If you're employed, EPF contributions provide a reliable avenue for retirement savings. With contributions from both you and your employer, EPF offers a stable foundation for your retirement nest egg.
Debt Instruments: Consider allocating a portion of your savings to debt instruments such as fixed deposits (FDs) or bonds. While offering lower returns compared to equities, debt instruments provide stability to your portfolio and serve as a hedge against market volatility.
Emergency Fund: Building an emergency fund is essential to cover unexpected expenses or financial setbacks. Aim to set aside 3-6 months' worth of living expenses in a liquid savings account or liquid mutual funds for easy access during emergencies.
Benefits of Actively Managed Funds
When it comes to mutual funds, actively managed funds offer several advantages over passive index funds:
Professional Management: Actively managed funds are overseen by experienced fund managers who actively research and select investments to maximize returns and minimize risks.
Dynamic Allocation: Fund managers have the flexibility to adjust portfolio allocations based on market conditions and emerging opportunities, allowing for optimized performance over time.
Disadvantages of Direct Funds
Direct funds require investors to independently research, select, and manage their investment portfolios, which can be time-consuming and challenging, especially for novice investors. Lack of professional guidance may lead to suboptimal investment decisions.
Benefits of Regular Funds Investing through MFD with CFP Credential
Investing through a Certified Financial Planner (CFP) credentialled Mutual Fund Distributor (MFD) offers several benefits:
Personalized Advice: A CFP-certified MFD provides tailored investment advice based on your financial goals, risk appetite, and investment horizon, ensuring your portfolio aligns with your objectives.
Diverse Fund Selection: MFDs offer access to a wide range of mutual funds across asset classes and fund categories, enabling you to build a well-diversified portfolio suited to your needs.
Final Words
As you embark on your savings journey, remember that consistency, discipline, and patience are key to achieving your financial goals. By diversifying your savings across various instruments and leveraging the expertise of certified professionals, you're laying the groundwork for a prosperous future.
Warm Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in