How you can build your Investment
Portfolio :
Based on our analysis of financial requirements, the foremost
consideration is prioritizing health insurance. In today's costly landscape,
medical expenses, particularly hospitalization, stand as significant financial
burdens capable of depleting your savings entirely during critical medical
emergencies. Thus, it is advisable to establish a comprehensive health
insurance plan as your primary financial safeguard. When procuring health insurance, it is
prudent to acquire separate coverage for your parents rather than opting for a
combined policy. Combining policies might potentially lead to increased premium
costs. The premium amount should ideally be calculated based on the age of the
oldest member within your family. This approach ensures a balanced and
practical assessment of the coverage expenses.
Subsequently, you can proceed with devising a Life Insurance
strategy. Opting for a term plan stands out as an excellent choice for life
coverage. It is recommended that the coverage amount be a minimum of 80 to 90
times your monthly earnings. For instance, if your monthly salary amounts to
Rs. 50,000/-, then the term insurance should ideally reach Rs. 40,00,000/- (40
lakh). However, you can certainly contemplate higher coverage as per your
monthly budget. This approach ensures the security and well-being of your family,
enabling them to navigate life's challenges with financial stability in your
absence.
Moving forward, we address the concept of an emergency fund. This
fund plays a crucial role in unforeseen circumstances such as medical
emergencies or job loss. This fund
should ideally amount to no less than six times your monthly expenses, while a
ceiling of twelve times is considered appropriate. Your monthly expenses should
encompass essentials like rent, EMIs, everyday necessities, utility bills
(electricity and water), and other expenses.
The allocation of your emergency fund should follow a structured ratio:
70:20:10 based on your monthly salary. Seventy percent (70%) is to be securely
placed in a fixed deposit. A fixed deposit offers a prudent means of managing
your funds, crucially not as an investment but as an integral part of your
emergency fund. Twenty percent (20%) of the fund should reside in your savings
account. The remaining ten percent (10%) is to be held as liquid cash, readily
available to address any emergent situations.
After securing the above like Health, Life and an Emergency Fund etc., now the time to plan your investment, it should be monthly, quarterly or yearly. Monthly investment quite suitable for planning, it will not burden on you and will easily manageable. So the ratio of your monthly investment plan is 50:30:20. 50% of your monthly income for your common need like food, rent, basic cloths, electricity and gas charges, school fees etc., 30 % is for your most desirable things like new television, new mobile phone , hoteling , holiday trip etc., and the last 20% is only for investments. Sometimes the expensive things is not possible to buy directly in one shot , like if you want to buy a new mobile phone and the cost of mobile phone is Rs. 50,000/- then you have to plan it accordingly, every months you have to keep a certain amount a side, avoiding other plans for further some months.
While doing investment always you can search for Tax Saving investment plans Like NPS, PPF etc., these are the safe and secured investment, also you can go for high risk fund like ELSS tax benefit funds etc., there are lot of schemes that legally issued or by government to save you taxes.
This is what how you can manage to build your Investment Portfolio.
Stay Healthy, Stay Wealthy and Stay Safe.
