Hello sir.. I'm a 33 year old mother of a 2 yr old boy..salary is 12 lac per annum.. never invest in ppf only. Want to save and grow money..how and where to start
Ans: You want to save and grow your money. That is a great start. First, let's understand your goals.
Short-Term Goals: Emergencies and vacations.
Medium-Term Goals: Buying a car or home.
Long-Term Goals: Retirement and child's education.
Building an Emergency Fund
An emergency fund is essential. It should cover 6 months of expenses. This fund provides financial security. You can use a savings account for this.
Starting with PPF
Public Provident Fund (PPF) is a safe option. It offers good returns and tax benefits. You can start with Rs. 500. But, it has a lock-in period of 15 years. So, it's a long-term investment.
Investing in Mutual Funds
Mutual funds are great for growth. They offer higher returns than PPF. There are different types of mutual funds.
Equity Mutual Funds: Invest in stocks. They offer high returns. Best for long-term goals.
Debt Mutual Funds: Invest in bonds. They are less risky. Best for short-term goals.
Hybrid Mutual Funds: Invest in both stocks and bonds. They balance risk and returns.
Benefits of Regular Mutual Funds
Regular mutual funds are managed by experts. They aim to beat the market. This can result in higher returns. Investing through a Certified Financial Planner ensures professional guidance.
SIP for Regular Investment
Systematic Investment Plan (SIP) is a smart way to invest. You invest a fixed amount monthly. It averages out the cost and reduces risk. Start with an amount you are comfortable with.
Avoiding Index Funds
Index funds only track the market. They do not aim to beat it. They might underperform compared to actively managed funds. Regular mutual funds, managed by professionals, aim for better returns.
Tax-Saving Investments
Consider tax-saving options. Equity-Linked Savings Scheme (ELSS) is one. It offers tax benefits under Section 80C. It also provides high returns over time.
Insurance Coverage
Ensure you have adequate insurance. Health insurance for your family is crucial. Also, consider term insurance for yourself. It provides financial security to your family.
Building a Diversified Portfolio
Diversify your investments. Don't put all your money in one place. Spread it across different assets. This reduces risk and maximizes returns.
Monitoring and Rebalancing
Regularly review your investments. Ensure they align with your goals. Rebalance your portfolio if needed. This keeps your investments on track.
Final Insights
Investing is a journey. Start with an emergency fund and PPF for safety. Move to mutual funds for growth. Use SIP for regular investment. Avoid index funds. Diversify and monitor your portfolio. Seek guidance from a Certified Financial Planner.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
