Turning 30+ ?
Well, that is an ominous figure in India that most parents warn us about. Most parents chalk out a little plan and some objective that you should have achieved by age.
Remember, it is not just another year on the calendar or a mere milestone, turning 30 means you are at the most crucial juncture of your life. This is the time of rising ahead in personal as well as professional genres. Most of you may have setup businesses of your own or working at a top-class MNC, while some of you may have got married or contemplating about taking the plunge.
Remember, money is everything, even if you deny the fact. Money drives this world and money is what you should achieve in handsome amounts by this age. Making some key financial decisions and allocations at this ‘crucial’ juncture of life will help you earn a fulfilling and stress-free retirement period. Here are 9 financial decisions we deem fit for any person to take at this age:
1. Get Some Insurance
It is now time to act smart and insure your life, health and assets. Do now wait for the moment when you really need an insurance policy and invest smartly. This is a crucial age when you might or are already married and you should think about your family, especially your parents, wife and future child\children. They will need a contingency fund to survive upon if something untoward happens to you. Life insurance costs way too low if you consider it as a step by step investment, but its benefits are endless and it gives you a carefree life.
2. Investment in Fixed Deposits or Public Provident Fund
This is another hedge fund like an insurance policy. It does not insure your life or health, but since it is tax free it protects your income from being wasted as government taxes. Also remember that any interest on these funds or profits arising from them are also non-taxable under Indian laws. A good scheme like this helps you put in some money safely with a few yearly premiums, none in the case of an FD.
Step by step and year after year, these funds will generate maximum interest applicable, close to 9% or more and help you in times of need especially since you put away this money as a safekeeping measure. A little compound interest will shape up your retirement years with steady income.
3. Buy a Home or Build One
Since it is tough to build a home, especially since you will be working every day to bring in money for your expenses, you can opt for buying a ready-made house. Since building a home is not everyone’s forte’ you can always opt to hire a contractor who can handle all tasks related to it. Buying a home in a metro city will be a tasking battle, but you will benefit a lot from a safe and secure home where your family can reside peacefully.
4. Consider Renting Unused Rooms
If you have a few rooms lying unused in your house or full of useless clutter, consider revamping it and putting it up for rent. It is highly practical to rent out unused space to recover some money from the investment you put into your house or apartment. This way, you can always earn steady income even if you are out of a job or are under a financial crunch.
5. Invest In a Mutual Fund or Other Hedge Fund
Consider investing into mutual funds or some share market shares to earn from the immense profits they provide over either the short term or the long term. They may be susceptible to market factors and economical risks, but they offer lots of profits that you can use to pay off insurance premiums or invest in better FDs. The right assistance and foresight will take you far if you play your cards right with such investments. If you have EMIs to pay off, this money can always come in handy to pay it off in one go!
6. Get Rid Of All Bad Debts
Whenever you put in money or take a loan for a depreciative value asset like a house, car or other such items, you end up with a bad debt with a long-term payoff period. It is always wise to set aside a handsome amount of savings from your income to counter any such incident that may result in non-payment of a bad debt like these.
Always consolidate your bad debt amount and avoid unaffordable expenditures. Do not splurge on any item you may regret later.
7. Child Education Funds
Accept it, even if you are not married now, you will eventually tie the knot and bring a new life into this world that will be your own beloved child. You should take proper steps from now to allocate a major part of your savings into a diverse account or fund as a reminder that this money is only for your child’s post-natal care and future education expenditure. Be a smart parent and your child will face no difficulty in getting the best from your able parenting.
8. Get a Good Retirement Plan for Your Parents
If you are a doting son\daughter, you should consider all that your parents have done for you over the years. Even if you do not live with them anymore or cannot give ample time to them when you return home exhausted from work, gift them with a term insurance plan called a pension plan that allocates a certain amount of dividend as a monthly pension. Take care of the premiums and help your parents overcome retirement issues.
9. Plan for Your Own Retirement
Invest in yourself! You work hard all day and earn money to meet expenses. Invest in a retirement plan of your own like SIP (Systematic Investment Plan) which will help you meet expenses once you are retired. Reward yourself with your own money, after all you deserve it!
These critical steps will spell out sure shot financial gains during your retirement years when your child grows up and your parents need your support and care during their last years. Invest smart at this young age and reap in benefits for a long, long time.