As single parenting has become a reality in many households, one must look at various investment options.
First and foremost is to have risk mitigants in place in which future income is covered through an insurance cover. A pure-term plan will do. This will ensure that even in your absence, the needs of your children and dependents are taken care of monetarily.
Do look at the suitability of the policy in line with your needs and requirements, and check the claim settlement ratio of the insurer, before taking the policy.
The next risk mitigant is health insurance. Having a floater cover is a good starting point. Do revisit the sum insured amount every three to five years. If you have a company medical cover, it is still better to have a personal health cover, which can protect your children and dependents. Next, one must have an emergency fund for 6-18 months of your monthly expenses. A higher amount will give you more comfort and cushion in case of any eventualities.
With the risk mitigants in place, one must set up goals and milestones in line with one’s future plans. Your goals and milestones need not be the same as that of your peers or friends. One must set up the milestone based on time-horizon, asset allocation and risk appetite.
Do not compromise on any of it. Having done this, do not rush into the investments. Ask questions on the suitability of the investment products being in line of your goals and only after you find an answer , invest. Once invested, do not second guess and monitor on a daily basis.
Review your portfolio every quarter or six months. Do choose a trusted professional, if you cannot manage on your own. Do ensure that the professional enjoys your trust.
Do note down or use digital documentation of all the investment and risk management data. To complete the framework, have a will in place. This will ensure that even in your absence, the children and dependents are adequately taken care of.
The writer is founder and managing partner of BellWether Advisors LLP