Tips to help you frame investment strategies for 2009 – 2 January 7, 2009
Posted by dhirendra1972 in Children's Education, Equity-to-debt Ratio, Insurance Plans, Long-term goals, Substantial Funds, Take-home Salary, Tax Benefits.Tags: Budget, Education, Goals, Insurance, Retirement, Salary, Tax
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30 To 45-Year-Olds with Kids
The major long-term goals for this category are buying a house, funding children’s education and providing for retirement. “If you are planning to buy a house, it’s better to wait for six months as prices are likely to correct further by 25%.
If you do decide to buy one, ensure that you don’t overstretch yourself. For instance, if a 2BHK flat fits into your budget, don’t go for a 3BHK assuming that you will be able to manage the EMI payout,” cautions Mr Pandit.
If your take-home salary is Rs 1,00,000 per month, the EMI outflow should account for less than Rs 30,000-40,000. Also, go for a joint home loan with your spouse, if possible. Not only will it enhance the loan amount you are eligible for, it will also maximise the tax benefits under Section 80C on the interest amount repaid.
“For children’s education, one can consider child unit-linked insurance plans (Ulip) or high-growth equity funds,” advises Dhruv Agarwala, co-founder, iTrust.in. The longer investment horizon (assuming that the funds will be required after 8-10 years) makes equities a viable option. The equity-to-debt ratio for the purpose could be 75:25.
Same will also hold true for retirement planning. At this age, retirement will be nearly 15 years away, which means you can invest in equities. Investment in public provident fund (PPF) is also advisable – apart from being a safe avenue, it also offers a return of 8% per annum. “You can consider real estate too, but only after parking substantial funds in equities, debt and gold,” adds Mr Pandit.
Besides, you shouldn’t forget life insurance, which is an important tool for providing for dependents in the event of an untimely demise, especially in uncertain times like these.
ref: thetimesofindia
