Many young working executives fancy the idea of early retirement. Taking control of one’s own destiny is definitely first on list of priority. To achieve this, one needs to take control of his financials. Otherwise, these dreams could turn into the nightmares. India’s life expectancy has increased to 68.8 years from 60 years in last 25 years. Planning for years post-retirement becomes very critical. With more years to live, income must also increase to maintain the current lifestyle. Besides, living life with basic dignity also requires prudent financial management.
Financial cushion is also a must to meet human aspirations as well as social obligations. Be it First foreign trip, Destination wedding or Child’s education. A proper planning today will set you free to follow your own free will. To achieve these coveted dreams, you have to let your investment grow. Time would be an important element here. Hence, earlier you start, the better!
First step would be to start saving from today. Investment decision also depends on the current age of the investors. Risk appetite and income level are important elements to decide investment strategy. Based on these criteria, here are the best options that an investor can consider
1. Stock Market: Equity market is the best investment option from a long-term point of view. History suggests, in long term equity is the best asset class. Stock market has delivered best returns over any other asset class. This asset class is suitable for a young Investor with long working life ahead. This investor class usually possesses more risk taking ability.
2. Equity Mutual Funds: Equity Mutual Funds provide the comfort of expert advice to an investor. It also helps to navigate market volatility better. Investment in Equity Mutual Funds helps to meet various goals of life. Bigger the dream, bigger should be the investment and longer the time horizon. An investor can expect realistic return of 14-16% over time.
3. Hybrid Mutual Funds: These funds take care of an investor’s need of risk management. Hybrid funds invest in stocks as well as bonds. These asset classes provide benefit of safe returns of bonds and benefit of equity at the same time.
4. Debt mutual funds: Debt mutual funds invest in debt or fixed-income securities. Treasury Bills, G- Secs, NCDs, are the primary source of investment. Debt mutual funds are attractive for investors more in need of a fixed income. It generates modest but higher interest than fixed deposits.
5. Dividend Income Funds: Instead of buying individual stocks, investors can chose to buy Dividend Income Fund. It provides regular dividend income along with benefit of equity. The dividend could be a steady source of retirement income. Dividend income may vary according to the prevailing market conditions.
6. Fixed Deposits/NCDs/ Bonds: These are the fixed income options rather than investment options. It helps in generating cash flow to maintain daily requirements. Investor can chose to invest in a short term or long term instruments. The decision depends on one’s own financial suitability. Investment options start from 1 year maturity and it could vary from 3, 5 or 10 years as well.
7. StockBasket: A handful of stocks picked up through extensive research can be a useful tool. An investor can enjoy the benefits of equity investment minus rigors of the stock market. Investors can avoid market volatility and letting experts handle their money.
StockBasket offers handpicked stocks to meet various financial goals. Various baskets include stocks that offer unique long term investment opportunities. It makes time to time revision of its portfolio. It helps to generate wealth over the longer time duration, in tune with goals and risk appetite in mind.
Conclusion :
In a developing nation like India, life is often fast and stressful. Post retirement is the only time when one connects with inner-self. It is the only time to reap the benefits of hard work of an entire lifetime and let no one own those years except you.
Only then, the true value of your life’s work could be truly realized!