HOW TO PLAN YOUR INVESTMENT AT EVERY STAGE OF YOUR LIFE

While choosing the places to save and invest in, experts suggest don't go randomly picking instruments. Note that your financial planning and your portfolio most importantly depend on your age along with risk profile and other factors.

Every decade of our life, from the time we start earning, commands a different approach towards how we invest our money. Having said so, there is a large number of people who struggle every day with financial literacy and get stuck in dire situations like huge debt or financial crisis during a disaster (like the coronavirus pandemic). A pandemic like this forces all of us to focus on our finances.

Here’s an overview of how the investment climate could change with your age:

Starting young in your 20s

For an individual in their early 20s, who has just started a career, may not have significant financial obligations and can afford to save a fair amount out of their earnings. Hena Mehta, Founder and CEO, Basis, says “While investing your money might sound boring in your 20s, starting young is easily the best way to get ahead. An adequate health insurance plan will take care of hefty medical bills and uninvited medical exigencies. It is cost-effective when taken early and therefore, a sensible choice to make in one’s 20s.” If you are working for a company that provides health insurance benefits, try to increase the cover if necessary, and also make sure to extend the cover to your parents if possible.

Reviewing your money in your 30s-

According to experts, 30s are the time to get serious with your finances by cutting down carefree expenses. Mehta says, “According to me, the 30s is the time to fortify one’s finances, sow the seeds of financial prosperity and reap their rewards for the rest of one’s life.”

You can start by allocating funds for long-term goals such as retirement. If you have goals like buying a house, you can start a kitty for the down payment of the house or focus on other goals like children’s education or any other long-term goals. Additionally, if you have already bought a life insurance policy, see if you are adequately insured.

Responsible investments in your 40s-

Mehta of Basis says, “If your 30s brought a whole new set of responsibilities like a flourishing career and a family, the 40s bring you more responsibility and angst about closing in on retirement. One of the most important things you can do for your finances at this stage is to pay off high-interest debt. It is also time to adjust your retirement account contribution.”

In your 40’s you will have to make sure you have sufficient life cover so that your family’s future is always financially secure. Another way to be prepared is by having an emergency fund that you can contribute towards every month

The youth of old age: the 50s-

By the time you reach this age group, if planned properly, your investment plans will be in place, providing you a comfortable, tension-free retirement. However, you can continue investing, but with a different approach. Note that investments, after you retire, should be aimed at maximizing your savings

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