As life progresses, we go through many changes. While wading through the sea of life, we come across a different set of circumstances at each stage, which sows the seeds for new financial needs. The important aspect to be kept in mind is that each phase needs planning to cater to the needs of that particular phase in our life.
Planning for the 3 Major Phases of Your Life
Here’s a look at the three basic stages of life and how they affect our financial needs, as well as what investment options would be of most help at those times:
- The first job and the joys of being single
You would have just finished your education and most definitely looking forward to living it up with the perks of your job. So, when someone brings up the topic of saving for the future, you might just they live on a different planet. Well, they are not wrong. At this juncture, time is your biggest ally, giving you the opportunity and the means to save up for the “big moments” of your life, without being tied down to any major responsibilities.
Most high yielding investments involve high risks, but since you are new to the whole financial world, risks might not be a good idea. So, consider mutual funds, where you can get potential returns. This is a great way to start your saving regime.
- Tying the knot and the joys of starting a family
As you settle down and get married, you can look forward to a whole new way of existence. Setting up a home or even buying one, having kids and educating them and more awaits you at this stage. This is a rollercoaster journey on its own. Remember how you made some bulk saving with your mutual funds when you were single? This is where it starts to pay off. This initial saving will give you the amount you need to set up a home or even pay the down payment of your new house, put away something for your children’s education and so on. Start diversifying your portfolio at this stage to get maximum returns with mutual funds. You can even venture into the stock market at this time.
- Retiring and the joys of the “senior” status
As you approach your retirement years, it is time to shift gears to make the maximum out of the last few years of your career. Try various investment options, instead of putting all your eggs in one basket. The aim is to ensure regular income for the time when you are no longer actively employed. Consider a mixed portfolio of varying risk levels, including shares, mutual funds, commodities and fixed deposits to get maximum returns.
As you sit back and reap the fruits of your investments, you will realise that your planning actually paid off at every juncture and helped to lead a full, yet stress-free, life.