As we continue to brave the COVID-19 pandemic, there’s no doubt we are feeling increasing financial stress with bills, pay cuts, job uncertainty, dipping into our savings and investments, and in some cases, even losing our jobs. So, we reached out to Yogita Dand, Certified Financial Planner, and invited her to host an Ask Me Anything session on the Girl Tribe by MissMalini app. She answered all the questions the Tribe had on the basics of financial planning, growing your wealth, smart investments, money management, financial safety and planning, and more. Scroll down to read all that she shared!
Q. What is the right age to start investing for someone who has just started earning? Also, what is the safest medium to invest in?
The earlier you start investing, the better it is. So, if you have just started earning, start investing with at least 50% of your salary. If you are really young, I would advise you to take a bit of a risk and start by investing in equity mutual funds with a horizon of at least 15 years.
Q. What is the best option to save for my children: Fixed deposits, mutual funds, provident funds, or insurance?
Every investment has its own advantage and disadvantage. Recurring deposits and fixed deposits for the shorter term can be kept for emergencies. Mutual funds help create wealth over a long period of time. Insurance is not an investment, it is a way to safeguard your dependents in case of any untoward incident that might happen to you. Start a PPF account in your child’s name which will cover the debt portion of his investment and simultaneously start a SIP in equity mutual funds for the same period, which will also help create an education corpus for him.
Q. Is investing in gold bonds sensible during the current times?
As financial planners, we generally advise people to invest at least 10% of their portfolio in gold by way of gold bonds or gold ETFs (exchange-traded funds). This acts as a hedge in case of any eventuality like a war or a pandemic, like this one. So yes gold bonds do make sense in current times too, but only up to 10% of your portfolio!
Q. What investments can I make to take care of my parents in their retirement and old age?
If you are planning to invest your parents’ money for their retirement, then first and foremost secure their investments in the Government Senior Citizens Savings Scheme which currently offers 7.40% yearly, payable quarterly and has a lock-in period of five years, with a maximum limit of 15 lakh rupees per person. You can also opt for hybrid mutual funds for them. If you are planning to invest in them with your own money, then I suggest ensuring you have a hefty Mediclaim policy first, for both of them. Post that, you can start investing in mutual funds, which you can liquidate in case of need.
Q. Should I be investing in cryptocurrency?
The issue with this is that cryptocurrency is not recognised as a legal investment in our country and is very volatile. In fact, if you have noted it crashed to nearly 50% in the last few days. Having said that, if you are willing to take a risk and have excess money that you can afford to lose, then you can invest in it through platforms like Wazirx or Zebpay. I do not advise timing any of your investments as you may end up losing money.
What would you like to know about personal finance management? Please share it with us in the comments below!