Hello sir! I am Aman Sharma,an 12 pass student,going to take admission in Engineering,who wants to do start-up after 10 year of engineering.I read lot of suggestions that you have given to many people, which made me to ask this question.
My financial income is zero right now since I am a student.
Very soon I will crack a hackathon so that I can start my income through internship further through job since I will get PPO through that.
Could you please suggest me what should be my financial plan (where to invest) to have passive income through that investment, which will help me to do start-up in future.
Sir along with financial plan name also mention their interest rate and risk associated with that.
Sir please note that I have zero knowledge of financial planing
Ans: Aman,
It's wonderful to see your interest in planning your financial future at such an early stage. I commend your proactive approach. Here are some steps you can follow to build a strong financial foundation and secure passive income for your future start-up.
Understanding Financial Planning
Financial planning is about managing your money to meet your life goals. It includes saving, investing, and managing risks.
Initial Steps
Emergency Fund: Save at least six months' worth of expenses. This will help during unforeseen situations.
Education and Skill Development: Invest in courses and certifications. This will enhance your employability and income potential.
Investment Options
Public Provident Fund (PPF)
Interest Rate: Around 7.1% per annum
Risk: Low
Benefits: Tax-free returns and long-term savings.
Mutual Funds
Interest Rate: Varies (10-15% on average)
Risk: Medium to High
Benefits: Professional management, diversified portfolio, and potential for higher returns.
Recurring Deposits (RD)
Interest Rate: Around 5-6% per annum
Risk: Low
Benefits: Regular savings with guaranteed returns.
Passive Income Strategies
Dividend-Yielding Stocks
Interest Rate: 2-6% dividend yield
Risk: Medium to High
Benefits: Regular income and potential capital appreciation.
Systematic Investment Plans (SIPs)
Interest Rate: Varies (8-12% on average)
Risk: Medium
Benefits: Disciplined investing, rupee cost averaging, and compounding benefits.
Risk Management
Health Insurance
Ensure you have adequate health insurance. This will protect you from high medical costs.
Term Insurance
Opt for a term insurance plan. This will secure your family's future in case of an untimely demise.
Long-Term Goals
Retirement Planning
Start contributing to retirement plans early. This will ensure financial independence in your later years.
Educational Savings
Save for higher education and any future courses. This will help in enhancing your skills and knowledge.
Final Insights
Starting early gives you a significant advantage. Regularly review and adjust your financial plan as your income and goals evolve. Seek guidance from a certified financial planner to tailor a plan specific to your needs.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
