The salary of an ordinary person keeps changing every year, and some days it becomes confusing when your paycheck is credited, and you wonder about the suitable investment and spending plan? What are the investment options for someone with your salary base? How should one invest in shares, mutual funds, policies, real estate, commodities etc. as beginners?
These are some of the most common thoughts one might think of.
Different salaries need a different investment strategy. It is essential to save for your future and plan your retirement simultaneously; however, securing your family is the most critical thing in your life. However, the requirements could be different for a different salary class.
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Salary of 15,000 INR - 30,000 INR
An employee of this salary bracket should not be very aggressive in investing since it's the start of one's financial career and career growth but should always have some emergency fund back up.
If you are married and have a child: The amount left after expenses monthly would be significantly less to invest but below are some places where you can invest:
1. Insurance Plan: Term Insurance Plan with a coverage of Rs 50 lakh or one crore to the least.
2. Health Insurance: Taking a health insurance plan is crucial for your family. This will help you meet any contingencies ahead.
3. SIP: Make a structured fund allocated further to SIP Mutual Funds. One can start with SIP funds with a bare minimum of Rs 500, and equity is also a good asset class to earn some handsome amount in the long run.
After marriage, try to plan and manage your savings with your partner so that both of you can have a clear view of your finances.
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If you are single:
If you are single and have no family responsibilities, you can invest 20 to 30 % of your salary in debt and equity. Make sure you learn to support and avoid wasteful expenses. Focus on creating an Emergency Fund and get into a habit of saving every month.
Read more: Investing vs. Saving: Which Should You Do, When, And How?
Salary of 30,000 INR - 50,000 INR
An employee of this salary bracket should invest around 10 to 15 percent in investments, apart from insurance, provident funds, benefits that your company provides. Setting aside Emergency Funds and saving up for specific goals must be done before deciding to invest your money.
1. Term Insurance: Primary and foremost to get Term Insurance Plan for Rs 1 crore cover.
2. Medical Insurance: Opt for a reliable medical cover that meets you and your family's ends and safety, even if your company covers it.
2. Disability Insurance: It provides you a healthcare cover if you meet with any uncalled accident or critical illness.
3. Make a plan as per goals: For short-term goals, invest in recurring deposits, fixed deposits, or debt funds. While for long-term goals, look for equity classes like SIP and Mutual Funds.
Read more: Liquid Funds vs Fixed Deposits: How To Make The Right Choice
Salary of 50,000 INR and above
The lifestyle of this salary bracket, especially in metro cities, is a bit higher than tier 2 cities. People get cars, houses, and expensive accessories as their primary. Ensure you are investing 20% of your income for your future ahead.
1. Long Term Insurance: One should get a Term Insurance Plan cover for a minimum of Rs 1 crore or even more.
2. Health Insurance: A medical cover plan for you and your family is a mandatory thing to go for.
2. Disability Insurance: This insurance helps you with a health cover if you meet with an accident or an unexpected illness.
4. Emergency Savings: Make an emergency fund as you will be left with a surplus. Create a three-month emergency fund for the future ahead.
5. Basic Financial products: Start investing in essential Mutual Funds, Bonds, PF, NCDs, fixed deposits to build a portfolio.
6. Loans: Avoid getting loans for expensive cars, luxurious items, or even for holidays.
7. Real Estate: Make a systematic balance with your EMIs; avoid investing in a second home if you have one already with no debt on it.
People with income over 2,50,000 INR should ideally invest more than 20 percent of their income in varied asset classes like equity, debt fund, liquid fund, insurance plans, real estate, commodities, etc.
(Check out 'Learn & Grow with Wizely' to read and learn all about personal finance and financial planning.)
