If someone is earning Rs 50,000 per month then how should he manage his income for a secure future?
For the convenience of the answer, let me assume that ₹ 50000 a month will be his cash salary. Cash salary means the amount deposited in the bank as salary.
If a person finds ₹ 50000 cash salary in the bank then he should keep these things in mind to manage his income for a secure future.
Earning around ₹600000 every year after deducting all kinds of expenses, you will be left with some 360000. Also, an increase in salary at the rate of 10% will also have to be considered and the amount of expenditure and savings will also have to be increased in the same proportion.
What is your list of financial needs for the coming 5 to 10 years.
According to this list, how much money will you need from year to year.
The financial requirements for the coming 5 to 10 years should be combined in such a way that it does not exceed your income.
Be prepared to take a loan for any major financial need as well as deduct savings to pay off its installments.
Such a big need can be some needs like buying a house, buying a car or getting big furniture work done at home.
After this, it would be appropriate for you to examine and understand the various investment options.
There are a plethora of investment options in the market which include high, medium and low level of risk as well as zero risk options.
Apart from this, the liability of income tax on the return on all these investments can also be a major issue which will play a big role in your decision making.
Like fixed deposit in bank and investment in Public Provident Fund is without any risk. But investment in Public Provident Fund is available with a locking period of 15 years as well as income tax exemption on the interest earned in it.
Investments in Mutual Funds, National Pension Scheme and Primary Stock Market are available with medium sized joking.
Trading futures options and derivatives in the stock market is a high risk investment.
Apart from this, investing in real estate or investing in gold or jewelery is also a good option.
Bonds of the Reserve Bank and fixed deposit schemes of government companies are also good options.
I believe that a man should not put all his eggs in one basket or there is a popular saying which means that a person who saves financially should not put all his investment in one scheme. Therefore, according to your financial need, you should invest in different pieces and in different investment options so that the risk is divided.
In conclusion, I want to say that you have to make your own combination between your income, your expenses and your savings. If you are not able to make room for savings between income and expenses, then it is your own responsibility for this too. Apart from this, if you are able to save more than expected then it is a positive message for you. At the same time, my advice would be to divide your investments into four types of investment options with a balanced portfolio. i want to say that
Make sure to invest in Public Provident Fund.
Fixed deposits have the lowest percentage of interest so try this option last.
Do not invest directly in the stock market, at least until you have gained good experience in the stock market. Therefore, invest in the stock market through National Pension Scheme or Mutual Fund.
Stay away from futures options and derivatives trading at all.
Investment in National Pension Scheme is available to you to get exemption in addition to Section 80C exemption. But the maximum investment cannot exceed 50,000 per annum.
There are tax free and tax responsible investment options in the market for investing in Mutual Funds but I find tax free options more appropriate.
If you plan to invest for the long term, then you can choose to invest in real estate and gold.
If you are interested to invest in gold then you should invest in online gold and not jewellery. Gold jewelery involves 25 to 30 percent making charge from the price of gold which is purely a loss while selling.
Finally, if you want to invest any amount for a very short tenure, then you should invest in a fixed deposit as the maximum interest you can get on a fixed deposit of up to 1 year is 6.5 percent per annum.