Investment Planning

Invest 1
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Hi Mr Batra,

i have been on service for the past 3 years, My Current Inhand Sal is 20K p.m. & Age 25 years & Single. So far i have made only two investments, One in PPF (total 20K, 10K each in present & last year ) & 25K(each in past & current year) in Birla Sun Life Insurance.

Would you please be kind to advise me on the following:
1. Investment in MF - Through SIPs, suggest some good funds as would not like to liquidate all of them till next 3 years, Should i look for Tax saving in these aslo, How is Birla's Maximiser Fund.Amount i would like to keep for MF's SIPs is max 3K p.m.
2. 2. Invest in LI. Please share if i need to make some more investment in LI or the above mentioned in sufficient.
3. Investment in Stocks/Shares-Apart from above i have some 5k lying with me, could you suggest some good stocks, here i would like to look into long term investment (more than 3 Years).
4. FD - Got some 1 Lakh as gift, please advise me a FD with tenure that gives most benefit, i am choosing FD so that it may be liquidated any time i need.However most likely i would not liquidate it till 3 years from now.
5. Apart from above investment matters i also wish to apply for a Credit Card, but due to low In Hand Sal of 20 K, so far HDFC, SBI(our Sal Bank), etc have refused to provide one. CC would be used for Hotel Bill(Trips), Dinners,online purchase, air tkt etc. Could you asdvise on this aslo.
Many thanks in advance for the patient reading & suggestions.

investment
3 Answers

Hi,

Its great that you have so much clarity on horizon of your investments. Here are some suggestions we can make -

  1. For Mutual Funds - You can consider IDFC Mid & Small Equity and HDFC Balanced or Reliance Regular Savings Balanced for your investments. Since you are saying you want to take money out in 3 years, its better to have some debt component.
  2. Please don't invest thru insurance. Insurance is supposed to bought for Protection. Its the most expensive form of investment. In fact, always opt for insurance plans which doesn't give your money back at maturity!
  3. Since you want to keep your 1 lakh FD as hancy cash but not sure when you would need it, its better to park that in a debt fund. Even a Monthly Income Plan would be a better option. Consider Reliance, Birla or HDFC Monthly Income Plan. You should know that FDs attract more tax than a debt or a MIP fund if your horizon is more than 1 year.
  4. While most banks would refuse credit card on various factors. But your own savings account bank may give you if your relationship is old enough. Citibanks credit cards are better than most other banks on benefits.

Hope this helps. -- moneysights.com

5

moneysights31

thanks for the quick response and for appreciating my view on investments.

Would request you to kinldy clarify the below points so that i may start my investment this weekend:

  1. Thank you for advsising me not to mix investment with Life Insurance! somehow i was ignoring the funda that security has its own benefits (should not ask more!!). As mentioned in my query, i have already paid two annual premeiums of Birla Sun Life 25K each, please advise if i need to buy more LI or this is sufficient.

  2. Can you please advise which stocks i should invest now/some time later as i have some 5K lying with me. Again here i'm NOT looking for short term gains.

Last but not least, i should not stop myself in congratulating you for designing such a wonderful site called moneysights.. Keep up the good work.

Invest•

Thanks Invest...our answers below - 1. Can't comment if the LI is sufficient. You need to be sure if you really need LI in first place. 2ndly, if yes, then what should be sum assured. The Premium Amount you pay really can't give me enough info. Thumb rule - only if you have dependents at this stage of your career then think about LI. 2. We stay away from offering stock suggestions unless we know your portfolio. But then there are many stocks that you can filter on moneysights to zero down on a few. Again, don't invest in stocks just because you have 5k lying. You need to know the role that stocks would play in your overall portfolio. If you are new to investing, first start with MFs. Learn more about stocks & then put your "hard-earned" money directly into them after careful research.

Hope this helps. -- moneysights.com

moneysights31

thanks for the advise!!

Invest•

Adding to moneysights response, annual premium paid for a insurance is not really a measure of fulfillment of your insurance needs.

Before commenting more on insurance, Can you please let us know which insurance policy you currently have. In case its ULIP, its not really a great product for insurance perspective. They have insurance and investment mixed and does not do justice to either.

Every earning person with liabilities (any loan, dependent family, kids) must protect his/her family from any bad future event. Ideally sum assured should be more than 10 times person's yearly income plus all outstanding loans.

Pankaj Batra5212
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