HOW AND WHERE SHOULD YOUNGER PEOPLE INVEST MONEY IN THEIR EARLY DAYS OF EMPLOYMENT?

By: Narendra Pratap

INVESTMENT TIPS FOR YOUNGER PEOPLE

• You must have noticed that people who have just started their careers are more prone to lavish

spending, as for the first time they are earning money and they just want to enjoy it.

• But, they realize it after some time, when they left with nothing in their accounts at that point of time

when they are stepping ahead in their lives. And the end results are loans, credit card bills, and cash on

call and above all “mental stress”.

• The right approach is to do your investments and savings from the very first day of your first salary

arrival.

SAVINGS AND INVESTMENT TIPS FOR YOUNGER PEOPLE

• Always have two accounts:

One should always have two accounts i.e. one in which salary comes in and

the other account in which you would transfer your probable savings.

Whatever you are going to expend in a month, leave that portion in your

salary account and transfer the balance in your second account.

Keep the debit card of the second account in a lock and try not to use that

with a commitment of expending only the amount that is kept in your salary

account for a month.

In case of any emergencies, one should look at the amount accumulated in the

second account.

CONT…

• Invest in Fixed deposits (Sweep in)

There is an Fixed Deposit(FD) called as Flexi or sweep in, where you can invest a

part of money left in a second account.

Flexi or sweep in FD will allow you to withdraw money from your FD even

through ATMs, net banking transfers or cheques.

In this case at the time of emergency you can withdraw your money and the

balance money will automatically be converted in your new FD at the same rate

of interest, thereby, crediting the interest amount earned on the part withdrawal

amount in your account.

CONT…

• Invest in Recurring deposits

RD is an investment tool where you can invest every month for

flexible period of time, thereby, earning interest on it @

approximately 8.00 – 9.00% per annum.

It is a good option to invest in as it is highly liquid and is generally

opened in small denominations that are very helpful at the time of

need, as you need not to break a huge amount of funds every time

and letting forgo your interest on it.

CONT…

• Invest in PPF

Public provident fund is an account that will provide you cumulative interest

rate on your deposits for a lock in period of 15 years.

It is the safest investment where you can even get a home loan at reduced rate

of interest on your PPF account.

You can invest up to Rs. 1, 50,000 and a minimum investment of Rs 500 per

year. You’ll be entitled to income tax benefit on your PPF account.

This will help you when you’ll be in your mid ages and your children would

require funds for their education. You must prepare for all such things in

advance.

CONT…

• Buy NSC’s

National savings certificates are the funds issued by Indian post which is tax efficient for a lock in period of 5 years, giving you good amount of returns.

CONCLUSION

• In this way a person on its starting days of employment, can plan his/her future by following the above criteria.

• This includes your current savings or liquid savings in the form of RD, your one year gap savings in the form of FD, your 5 years gap savings in the form of NSC’s and your long term investment in the form of PPF for 15 years.

• For getting life insurance, I would suggest you to take it after 2 – 3 years when you rise in your income levels.

• So, roll on your sleeves to walk on the above parameters. Go for it and experience it.

THANK YOU AND BE HAPPY