Success Blog

EARLY BIRDS

Financial planning in these early years would mean creating wealth aggressively. Accumulated wealth would be of great advantage when the person decides to settle into matrimony or when buying big-ticket items like a home.

The target should be to invest approximately 40% of net income. Equities directly or equity-based mutual funds should be an absolutely critical element in this portfolio it can reduce in later years of life once a fair amount of wealth has been amassed.

Life insurance may be totally irrelevant for this person unless there is someone who depends on his or her income. Low yielding investments like a fixed deposit PPF are best avoided for this person.

LATE BLOOMERS

Financial planning for this category of singles would entail creation of a safety net, which would help if the person wants to quit a regular job or start a new venture. It would ensure that s/he has enough wealth to maintain his /her lifestyle for the rest of his/her life and also pursue a hobby or interest as a career.

The planning strategy would depend on how much is accumulated. The first target here should be to have enough money to last a lifetime so that one does bit have to depend on anyone.

Once this threshold is achieved, a balanced investment approach would be fair as the need then to create wealth is not as much as to protect and nurture it.

Life insurance is again not a requirement unless there is a dependent child. Existing life insurance, if any, may be curtailed to optimize use of money to other avenues. Preparing a will and identifying an executor of estate is very important as you don’t have heirs and may like the money to be utilized in a certain manner once you are gone.

Consolidate all assets and do not spread too far, that is across cities and countries. Do not have multiple bank accounts everywhere and investments all over the country or the world.

Real estate in multiple locations is avoidable here as management and inheritance will both become an issue later.