Salaries keep revising every year, it often becomes really confusing when you get your salary as you wonder about the right investment and spending plan?
What are the investment options for different salary brackets?
An individual every month thinks of starting off an investment But keeps on postponing it, needs to understand that cost of delay in investment is too high.
A beautiful Quote was given by Warren Buffet – “Do not save what is left after spending, spend what is left after saving”
It is important to save for the future and plan your retirement, however, securing your family is the utmost important thing for life. The requirements could be different for a different salary class.
If Your Salary is Rs 25,000
a) In case you are married and have a child:
The amount remaining after expenses, each month, would be very little to invest. But the places where you should invest are:
1. Insurance Plan: Term Insurance Plan for a cover of Rs 50 lakh or Rs 1 crore.
2. Medical Insurance: Take a medical insurance plan for the family. It is very important for meeting contingency.
3. SIP: Make a designated fund that can be allocated to SIP Mutual Funds. SIP can be started with a minimum of Rs 500 and equity is a good asset class to earn a handsome amount in the long term.
b) In case you are single:
”In case you are single and have no responsibilities of family, you can invest 20 to 30 % of your salary in both debt and equity. Make sure you learn investing and avoid wasteful expenses,”.
If Your Salary is Rs 50,000
An employee of this salary bracket needs to invest around 10 to 15 percent in investments, other than insurance, PF, benefits that your company provides.
- Term Insurance: Get a Term Insurance Plan for Rs 1 crore cover.
- Medical Insurance: Get a medical cover for you and your family even if your company provides it.
- Disability Insurance: It provides you a health cover in case you meet any accident or critical illness.
- Make an investment 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.
If Your Salary is Rs 1,00,000
The lifestyle of this class, especially in metro cities is a bit higher. People buy cars, houses, and expensive accessories in this bracket. Make sure you invest 20% of your income for the future.
- Term Insurance: Get a Term Insurance Plan cover for Rs 1 crore or more.
- Medical Insurance: Medical cover plan for you and your family is a must
- Disability Insurance: It provides you a health cover, in case you meet any accident or a critical illness.
- Emergency Fund: Make an emergency fund as you will be left with a surplus. Create a three-month emergency fund for the future, invest in recurring deposits, fixed deposits, or debt funds.
- Simple financial products: Invest in Mutual Funds, Bonds, PF, NCDs, fixed deposits.
- Loans: Avoid loans for holidays, expensive cars, or luxurious consumer goods.
- Real Estate: Make a balance with your EMIs, avoid investing in a second home in case you have one already.
People with income over Rs 2,50,000 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. The most important thing to keep in the mind is the investment which your friend or colleague has made is not be suitable to you, because both have Different salaries, Life Style, Goals, etc, it’s always recommended to take advice from a professional financial advisor.