Hello Everyone! Welcome to my blog. We all know that unlike the US, India do not have any social security system for their citizens. Therefore, today I am going to discus with you on how to make your future life safe and secure by using the self help concept.
But before that you need to understand what is the meaning of security. You are now young, have a job, and earning a handsome salary. However, one day you will grow old and will retire. So, who will take care of you when you cannot take care of yourself. Good question! Well the answer for many Indians is that their wife and children would certainly help them out.
Well, in my 30 years of life, I have seen old parents who invested almost 90 per cent of their savings on their children especially the son, sending them to good schools and colleges, got nothing in return for various factors and reasons. What if your son moves out. What if he falls ill and recovers late. You need to get good returns of your investment. In one case, a parent lost their only son in a bus accident. Now, who will take care of them? So, this traditional and old system which is considered safe and secure, is unfortunately not working.
First we should ask ourselves, what do we want from our investment? Money and security. So, if we invest a part of our savings in some good financial products at a young age, we could get a good amount of money at our old age. At the same time we should also make sure that our children are getting good education so that they can earn and save enough for their retired life.
When you turn eighteen, just move out from your parents house and move in to a rented apartment. By doing this you will ease the financial burden from your parents shoulder. At least, now they can spend some time alone together. What's more, you can now enjoy more privacy. You should also try to get a part time job along with college so that you can pay for your rent as well as food and other services. If you have more space in your apartment then place an ad in the local newspaper and get a roommate.
After you finish college, try to get a full time job. Always remember that the asset you have now is not money but time. You must try to convert each and every hour of you precious time into money. You will need this money later when you grow old to buy service, such as housekeeping, laundry, etc. Open up a savings account in a private bank with facilities like internet banking, debit card, phone banking, ATM, etc. Then start investing 25% of your monthly income regularly into an equity diversified mutual fund through SIP. SIP stands for Systematic Investment Plan. Invest regularly. You do not need a post office savings or a bank fixed deposit at this young age. You must invest more into equity oriented mutual funds. Do not go for direct equity investments unless your are a professional.
If you save enough to pay for your rent then consider taking a home loan and buy your own apartment. You should also buy a medical insurance which covers almost all major illness. You may buy a Life Insurance Policy only if you need one. You may not need it if you are single, unmarried and have no children. If you can afford a car loan then get it and buy a new car. That way you will save money and time.
I will add more to this article in a few days. So long, keep visiting my blog everyday and find out more about social security and financial security by diversifying your investment portfolio.
Great post ! :)
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