Things You Should Accomplish Before You Turn 30

While turning 18 and then 21 are momentous occasions because each milestone opens up a world of opportunities for us, turning 30 is more about the emotional impact. What is it that makes one think that life is all downhill after 30? Maybe it is the knowledge that many of the most successful people in the world achieve their glory before the age of 30. For instance, Steve Jobs founded Apple at the tender age of 21, while Mohammed Ali became the World Champion at 22. Then there was Mary Shelley, who wrote the still popular Frankenstein at 21, Bill Gates earned his first million by 23, the same age as Isaac Newton when he created Calculus, which hounds us to this day.

So, what do you want to achieve before you turn 30? Would you want to buy your own home, even if you need to take a home loan? Here are some worthwhile goals. 

Pick Up a New Skill to Enhance Your Career

It is never too late to learn something new or gain a new skill. So, consider what courses could help you along your career path. There are plenty of online courses available these days, from languages courses to specific vocational skills and knowledge training. You might just want to look them up.

Savings

And it is never too early to start saving. While you still have lesser responsibilities, you can put away part of your income towards building a solid nest egg for your later life. Check out your options for investments, from insurance policies to mutual funds, ULIPs and even fixed deposits. Invest according to your risk appetite and make sure you diversify your portfolio, while also keeping aside some liquid funds for emergencies. The earlier you start, the more you will gain from the compounding effect of interest rates.                              

Tax Savings

Did you know that many of the investment vehicles in India entail tax benefits? In fact, even if you take a home loan, you can use the repayment installments to gain tax exemptions. Life insurance, health insurance and various savings schemes available in the country are eligible for tax benefits under the Income Tax Act of India. So, make sure you find out which ones these are and start investing while also saving on taxes.

Build Your Network

According to Global Web Index, usage times for social media sites rose from 1.66 hours per day in 2013 to 1.72 hours per day in 2016. You have sites like LinkedIn that can help you improve your professional network. This networking could improve professional credibility and give you an edge when you need career help.

Buy a Home

While this might seem like a big ask, buying a home isn’t as monumental a task as it used to be. With the easy availability of home loans, convenient repayment options and more, the sooner you think about owning a home, the better. In fact, with the real estate sector in India being on a downward spiral in recent times, investing in property could make sense now, before prices start soaring again.

As HW Longfellow wrote, “….and Time is fleeting,
And our hearts, though stout and brave,
Still, like muffled drums, are beating
Funeral marches to the grave.”

While you still have time, make the most of what life has to offer.

Retiring Soon? What's Your Strategy?

In a country like India, where the economy is growing slowly and the inflation is at an all time high, retirement planning is a tough job. In the giant financial product marketplace, one might end up buying a financial product that might not yield an amount sufficient for post-retirement life. The marketplace is filled with numerous retirement products for investment in India. But before we dig deeper, let us get familiarized ourselves with two phases of retirement planning: accumulation and distribution. While the accumulation phase requires the accumulation of the amount required for post-retirement needs, the distribution phase comes into picture when the accumulated amount needs to be aptly distributed to fulfil the financial needs arising in later life.  

Pre- and Post-Retirement Investment Products

1. New Pension Scheme (NPS): Having delivered annual returns of around 10% in the last couple of years, NPS is a perfect product for retirement. Although this product is mandatory for government employees, it is open to all individuals across the country. NPS comes with a mandate to invest in an annuity insurance plan worth 40% of the total amount accumulated through NPS at the time of retirement.
2. Employee’s Provident Fund (EPF): With a fixed rate of return per annum (8.5%) and tax deductions of up to Rs. 1 lakh, EPF is the most common and popular saving instrument in India. Although EPF does not impose restrictions like mandatory annuity purchases, it is strongly suggested to keep investing in the EPF account (by means of EPF transfers in case of job change) and not close/settle it upon leaving the job. This will help earn guaranteed return as an outcome of compounded investments.
3. Equities: Instruments like stocks and mutual funds, which offer equity investment, are unbeatable when it comes to providing maximum returns. For retirement needs, make sure to pick products under these instruments for the long term (10 years or more). However, keep a check on your products and review them annually to identify poor or non-performing products and replace them with better ones.
4. Monthly Income Schemes (MIS): Getting a regular income is of paramount importance to someone who is retiring. Schemes that offer monthly income are called monthly income schemes and are provided in the form of funds by means of investment in mutual funds. Such schemes are also offered by post offices at an interest rate of 8.4% per annum and a maturity period of 5 years. MIS requires the investment of a lump sum. The corpus thus accumulated is further invested in numerous financial instruments to ensure a fixed monthly income.
5. Pension Plans:Much like the MIS, pension plans also require you to invest a lump sum amount in exchange of monthly income. These plans are offered by insurance companies and under mutual funds; however, the rates charged by insurance companies tend to be higher than those charged under mutual funds.

With most of the investment products like NPS (which requires compulsory investment in annuity insurance plans) and pension plans requiring early and long-term investments, it is advisable to start early savings for retirement. This can be anytime between 2 and 3 years after one gets his/her first job.

Why to Use Child Plan Calculator?

The cost of a two-year MBA course in the Indian Institute of Management, Ahmedabad, has risen 400 percent since 2007 and if the same trend continues, it will reach a stupendous Rs. 95 lakhs, according to a report in the Economic Times. Can you imagine how much you would need to save if you wish to send your child to such reputed institutes? An approximate estimate for the amount of funds required by you to meet your child’s advanced education can be estimated using tools like a child plan calculator.

Need for Child Insurance Plans

Rising education costs and high aspirations of parents warrant the need to build a substantial kitty to fund the massive costs of education, co-curricular activities and other requirements. Add to this the cost of their marriages and the total amount required for your children’s welfare shoots up further. What to do in such a scenario? Invest in a variety of options like a child plan and make some investments that offer good growth.

The exact amount of funds that you will need and can invest now can be decided with the help of insurance tools like child plan calculator and retirement planning calculator (if you are looking for an investment for building a post retirement fund). Using these tools is very easy as all you need to provide is the current age of your child, the age at which you need the funds, your current savings, the type of education which you want your child to pursue, the expected tuition fee and the inflation rate. By using this information, the tool provides you with the amount of funds that you need to save. Now, you have a final target and can calculate the amount of monthly savings that you need to target.

Child insurance plans can be regular premium plans or single premium plans. In case of the former, annual premium payments need to be made until the child turns 18 and after that, the insurer pays back the amount in installments or in one go, depending on the terms of the policy. Such policies generally cover the life of the parent and in case the parent dies before maturity, the premiums are waived off but the sum assured is paid on maturity.

While some child plans are money back plans, others are unit linked policies, which invest in the market to create wealth for the policy holder. Most insurance companies offer varied options with different risk profiles to cater to the requirements of all types of investors.

Apart from offering life cover, several child plans come with options to add various types of riders, so that you can combine the goal of saving for your children with other aims like taking accident insurance or critical illness insurance.