Postpone your goals if you have a lesser income!

By | April 15, 2011

It will be wise of you to take this step as it is not possible for you to save a huge portion of your income as you will be having financial responsibilities.

For example, if you wish to buy a house 5 years from now, but your income is only about Rs. 15,000 and after paying off all your expenses, you have only Rs.5000 left in hand, obviously your dream of buying a good big house is quite far away.

In such situations, getting into a home loan or any kind of loan to finance your other various expenses, like your sister’s wedding, or your own higher education program etc, will increase the burden on your finances.  So, it is best advised to invest as much as you can and cut down on unnecessary expenses.

If your family has any savings but have stashed in the savings account of a bank, try investing them in equity funds where it is possible for you to build a large corpus and in turn buying a bigger house in future might seem more possible.

Be careful if you plan to invest in highest NAV providing Unit Linked Plans. Although they project to be pure equity linked, these asset managers transfer the funds from debt to equity and vice versa, to save their capital. These steps when taken have hidden charges which will be borne by the investor, thereby reducing the value of the returns. In the highest NAV returns scheme, you get a maximum of 6-7% whereas investing in PPFs will guarantee you more.

As you are able to advance forth your investment pattern, try to diversify your portfolio and start investing one large cap name, two multicap outperforming funds and maybe one mid and small-cap fund. Pursuing this, you can be guaranteed of not only higher returns and good tax benefits where your financial goals can be achieved.

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