Express Money: Ask Us
—Ravi Shah, Mumbai
The financial plan will depend on what your objectives are. The objectives should be timed. For example, you may want to build a corpus of R 10 lakh in next six years.
Moreover, the other important factor in financial planning is your risk appetite. It means how much risk can you take. For example, equity investment will give you maximum returns in long term but there will be short term fluctuation in returns. Can you bear the short-term fluctuation?
In my view, since you are young, you can go for sound, equity-based mutual funds or balanced funds. Start a systematic investment plan in mutual funds with your savings.
Do not take many insurance plans as the returns are extremely low (about 4 per cent to 6 per cent). Take a term insurance which will cost you a very small premium with very high protection amount. But there will be no return if nothing happens to you. The savings from this premium can be used for systematic investment plan in mutual funds.
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