Nowadays, conversation of any importance always centers the young generation. It is solely because 60% of the population in India is young guns and they are making a difference to the economy. They are believed to be the major contributors to the Gross Domestic Product and the current and future leaders of the nation.

With the young wave engulfing the entire country, there are fundamental changes in the lifestyle. The dominant culture today is not one of sustenance but one of excess. With changes in the job sectors and sharp rise in the employment by private sectors, the financial power of an individual is exponentially higher than what it was in the last few decades. Along with a culture of excess, one is always haunted by the wave of materialism, where we are forever acquiring materials. Eating out and shopping is not a rare phenomenon anymore, rather a common weekend activity.

With such sharp changes in lifestyle we increasingly miss out on an old school thought, the emphasis on savings. The tales of youngster being in debt and depending upon credit cards is becoming a common phenomenon. Hence, the old habit of savings is slowly being replaced by overspending. In such a state, we need to think about why despite having more financial ability we still suffer from lack. ‘Enough’ is not a commonly used word and this points to an unfortunately common phenomenon of the lack of savings and investment.

A simple change in lifestyle could possibly change this habit. Let us see what steps can be taken to make your investment journey a success.

Assessment of Income and Spending

The easiest way to assess your spending is not to throw the bills or check the list of transactions on your net banking account. The only way to save is by analyzing how you spend and the avenues of your expenditure. Then you can identify the areas where you can cut down and slowly start your savings. Simply speaking, total spending deducted from your net income is your savings. Hence, if you do not have any funds at the end of the month, you need to start figuring out your spending habits and start saving.

Make a List of Goals

Personal goals define your investment needs. What are your goals? Goals are milestones in your life which you wish to achiever for personal gratification. However, to be able to achieve this you need a strong financial backing. To be able to make a list of goals, the best and probably the most effective way is to put the goals along a timeline. Goals can be defined as:

• Short Term Goals: These are goals that have to be achieved in a short span of time say a year or two years. These are goals for which you may require corpus immediately.

• Intermediary Goals: These are goals that are a little further away. There is still time left for investments and wait for the returns to generate a decent corpus. These goals could be five years or seven years down the timeline.

• Long Term Goals: These are goals which are usually to be achieved at an advanced age like retirement or goals set out that you wish to achiever after ten years, or fifteen years or even further.

Once you have decided your goals to be any of these three and marked your goals with a timeline, you can start planning your investments based on these.

Find Out Your Total Savings

Savings could mean the little money stashed in your bank account or all the gift money that you have deposited in your almirah. Money that is lying idle and is not being utilized to generate returns of any kind could constitute your savings. Gather all the money and get a definite number on your total savings. If you have been working for a few years now and you only have few thousands to account for your total savings, it is not a good sign. The amount you save speaks about your finances more than your net earnings. Hence, it is time you took an assessment of your savings and see where you stand financially.

Know Your Investment Needs and Risk Taking Ability

Another important aspect that defines your investments is your risk taking ability. There is nothing wrong in being careful or even wanting to make profits. In most personal goals it is seen that calculated risk is an essential component to generate returns and facilitate the growth of the corpus. The perpetual question a lot of investors ask is, does the risk determine the investment need or the investment need determine your risk. Let us consider a scenario where your personal goal is buying a house in the next ten years. It means you might need a considerable corpus. A traditional method of investment is not going to be enough. In this scenario, investment in stocks or equity mutual funds becomes necessary to give your portfolio that extra boost. Do not let your risk taking ability be a hindrance to your investment needs; also avoid having unrealistic expectations and taking unnecessary risks.

Have an Investment Plan

An investment plan is a comprehensive map which shows how your money is being channelled into various investment instruments. Investment plan also becomes your personal guide which tells you when the insurance premiums have to be paid, the due date for the Systematic Investment Plans (SIPs). As an investor you could make your own investment plan. However, experts are of the opinion that an investor should ideally seek the help of a professional to come up with an investment plan. A financial adviser is one such expert who has knowledge and/or experience to help you come up with an investment plan suited to your needs.

Start Your Retirement Planning

As investors we tend to ignore the long term goals. Ignore the goal of retirement planning at your own risk. You only have your corpus to support you during the retirement days. Hence, planning for it is absolutely crucial. You do not have to start investing lump sums at an early stage because you will have other goals to focus on. However, a small sum invested every month through SIPs could take you far.

As a young investor you do not have to start investing lump sums. Just disciplined investments, even if they are small sums could be enough for a retirement corpus. The amount that is enough to invest when you are 25 years i.e  5000 invested every month over a long period of time could become a sum as huge as a lakh per month to generate the same returns. Hence, start retirement planning and do it now.

Need for an Emergency Fund

An emergency fund is what you will rely upon when you have to tackle a financial situation that you had not anticipated. An emergency fund should consist of 3 to 6 months of your monthly income. In your investment plan you must include a component of uncertainty and a financial provision to tackle the uncertainty. The key to having an emergency fund is easy access to funds without disturbing your ongoing investments. Hence, do not invest the corpus for emergency fund in instruments that have a lock up period such as Equity Linked Savings Scheme or fixed deposits. Liquid funds in Mutual funds could be a good option for such corpus where you could invest for as less as a month. A successful investment plan must include an emergency fund so that despite adversities you well planned life and the corresponding investments continue to run smoothly.

Rebalance and Readjust Your Portfolio

Making an investment plan is not a onetime thing. Investments are instruments that have to be changed as when our needs change. The investment plan that was ideal when were amateur investors will not be the same when the investors are middle aged and at the peak of their income. An investor in their 60s will have a different investment plan than an investor in their 20s. A successful investment plan is that which is reviewed and boosted periodically. Given below is possible asset allocation that could be done when an investor is at various stages in his life. Rebalancing and readjusting is ensuring that your investing mechanisms stay well oiled.

The young generation is driving this country. They represent the present and the future of the country. The young generation has to ensure that they, the driving factor, are also driven by the right motives. As professionals one should and must enjoy their lives and grasp all that life has to offer. However, it should not come at a heavy cost to your future needs. The young generation should become aware about the investing options and slowly the wave should change from savings to investments.

Now it is time to live life king size with no more a list of goals to fulfill. Your life is going to be more than just a list of goals that has to be ticked off. No more living from one goal to another. You can pursue all hobbies that you left midway to get on with ‘real’ life or go on the cruise that you had planned in your 30s. You can embark on this part of life sans all worries because you have saved and invested enough to ensure that from now onwards is nothing short of comfortable. However, you always have to ensure that the fixed income you have generated and the regular income you have planned stay on track. This is how you can keep your finances in track in your 60s:

Make a Financial Inventory

Financial inventory consists of assessing your financial situation in term of assets and liabilities. You are in a stage where you have already taken retirement or are away from it by just a few years. Your Insurance term plan and other policies may be close to their respective maturity dates and you are due to get a lump sum. You may have received a lump sum from a SIP that you started in your 20s OR 30s. The NPS account has reached its maturity period and you will start receiving a monthly income from that. This is the period where you might be receiving or have received lump sums and regular income from your investments. All of a sudden the cash flow might be overwhelming. Hence, it calls for financial inventory where you document every source of cash inflow and match it with cash outflow. This will give you a clear idea of your monthly income and expenses.

Compulsory Capital Protection

Capital protection refers to a situation where whether your investments are making profits or losses the principal amount is in no danger of reducing. Capital protection is crucial in the 60s because from retirement onwards your chances of relying on fixed income are higher. Capital protection funds which invest in fixed income instruments and also allow capital appreciation by investing a small portion in equity is a good investment option. Hasty and risky investments in volatile funds can be fatal for your retirement corpus. Therefore, the aim of your investments is not to get higher returns but to make sure they are earning enough returns and not becoming stagnant or risky.

Invest in Senior Citizen Savings Scheme (SCSS)

This is a savings scheme exclusively for the senior citizens. As on 1/4/2015 the interest rates are 9.3% and paid out on a quarterly basis. The maturity period is 5 years. The minimum deposit is 1000 INR and cannot exceed 15 lakhs INR. After maturity, the account can be extended for further three years within one year of the maturity. This scheme is also applicable for tax exemption under section 80C allowing senior citizens to enjoy tax rebates. The scheme has a moderate risk profile allowing senior citizens to generate returns without putting their capital at risk and avoiding volatility of markets.

Invest in Mutual Fund MIPs & Balanced Funds

Since your risk taking ability has goes down substantially in your sixties, you should shift or invest a part or your investments in MIPs of Mutual Fund with Quarterly or Monthly Dividend payout options. Mutual Fund MIPs are hybrid dent oriented conservative schemes with 15 – 25% exposures in equities which helps you get a little more tax efficient returns over bank or post office fixed deposits.

In your sixties, the other attractive investment option could be balanced fund schemes of mutual funds. Balanced funds are hybrid equity oriented schemes which invests 20 – 25% in debt and rest in equities and thus provides much better return than bank fixed deposits, MIPs, SCSS, Post Office MIPs and fixed deposits. However, please note that due to higher equity allocation in balance funds your investment horizon should be atleast 4 – 5 years onwards. While the longer holding period ensures risk diversity, it also helps in compounding. Another interesting aspect of Balanced Funds is tax free dividends and no capital gain tax in case the holding period is more than 12 months.

Find Alternate Means of Generating Income

The retirement corpus and the receipts of various investments over the years maybe enough to cover your expenses. However, there is no accounting for needs and lifestyle. To accommodate various changes in your lifestyle and to keep up with changing times and prices you always need to be financially prepared. If you have properties that are not being used then you are not tapping into your assets fully. You may let out an empty property which could generate monthly cash flow. If you wish to move to a smaller accommodation because you do not need the big house as your kids have all moved out, then, the big house could also provide a steady source of income. Exploring options within your available assets could provide regular income.

Asset Allocation

In 60s it is about safekeeping your money rather than chasing returns. Hence, asset allocation should focus on capital protection rather than capital appreciation. Asset allocation is crucial to ensure that your fixed income does not remain stagnant and keeps generating the returns without endangering the capital. Here are some possible asset allocation strategies depending on your investment tastes and preferences. In the table below it is clearly shown that an investor who is above 60, despite having high risk appetite is advised to ride low in equities. This precaution is usually doled out by financial planners who are assisting in your retirement planning. Emphasis is given to debts as it allows moderate returns with lesser risk on the capital.

Draft Your Will

We have always been told to hope for the best and prepare for the worst. Preparing a will is doing just that. In your long life you may have already understood, life rarely goes as planned. Hence, making a will is going to benefit you more than harm you. It will also allow you to do an assessment of your available assets and your financial situation. In case you are incapable of taking financial decisions you may want someone trustworthy and capable to take that place. Hence, nominating the individual in the will safeguards your assets and your family members. Select an executor who is usually an unbiased individual to foresee that the dictates in the will be carried out in your absence.

You are entering a beautiful period in your life where the road ahead allows you the luxury of leisure. Take the pottery class you wanted to take or the dance class in the local school. You have worked hard to build yourself and your spouse a good life. It is time you started reaping those benefits and live a life free of worries. Welcome to the sweet sixties beautiful times are ahead of you.

What better opportunity than this festive time for women to take stock of their financial priorities.

Women are naturally adept at multitasking and inherently astute at decision making. They are now playing a pivotal role in financial decision-making in terms of earning, spending, saving and investing, whether as professionals, entrepreneurs or homemakers.

Here are eight key points to help women investors steer the larger cause of their financial independence and prosperity through wise investment decisions.

Put investment in perspective

Investment is about maximizing returns and minimising risks, and is a function of prudence and patience. Once we put the need to save and invest in perspective, we capture the essence of key investing paradigms, tools, and techniques, thereby making the most of the investing avenues and instruments. We can’t control market behaviour, but we can define our risk appetites exactly in line with our financial status, potential, and aspirations. More often than not, investors themselves have risky temperaments but blame their blunders on the financial instruments.

Steer clear of emotion-led investments 

Wisdom alone helps us break the vicious cycle of earning and spending that continues unabated at the cost of saving and investing. Reckless investing based on an emotional pull leads one to a vicious cycle of financial doom: lack of knowledge leads to indiscipline, which in turn makes one vulnerable to mounting debt and the lure of quick money schemes. At times, the glitter around a product can shield the inherent risk. Thorough research can help separate the chalk from the cheese.

Define your safety margin

In this era of perpetual uncertainty and near-fatal disruptions such as COVID-19, emergency funds have assumed monumental importance. Arrive at the exact amount to be set aside per month after taking stock of your earnings and expenses, and debt like loan EMIs and credit card dues. More importantly, ensure the liquidity of the emergency fund to enable fast withdrawals when required. A fixed deposit with short-term lock-ins is a good solution that will earn you interest, without compromising on liquidity.

Set goals before you seek to score them

After you arrive at the investible funds after defining your emergency fund needs, it is important to define your short-term and long-term goals, which in turn would define your investment goals. In the context of equity, this effort will help you define:

-Investment Focus: like Growth, Income, Value, Cyclical, Small cap, Mid cap, large cap

-Investment Avenues: like direct stocks, Portfolio investing, Mutual Funds (MFs), Exchange

Traded Funds (ETFs) and other avenues like Fixed income instruments, currency, crypto, real estate, or gold

-Investment Venues like Nifty, BSE, international exchanges and the like

Respect the value proposition of all asset classes

‘Never put all your eggs in one basket’ may sound like a cliché, but it helps you maximise wealth and minimise risks. No source will give consistent returns all the time but together they will balance your earnings and deliver better results. Over the last 20 fiscal years, different asset classes like equity, debt and gold have outperformed each other at different times. A prudent selection of investments diversified across each of these asset class would enable us to not only capture the peak performance of all asset classes, but also reduce the over reliance on specific asset class.

Put Equity in perspective 

When we talk equity, we must grasp the difference between risk and volatility. Risk denotes the uncertainty of investment returns emanating from a host of factors including interest rate fluctuations, political uncertainty, credit risk, inflation, liquidity crisis and the like. Volatility, on the other hand, denotes the variations in investment value over time. This variation is not a risk if your investment is fundamentally strong. Equity investments done right help beat inflation and create long-term wealth.

Review is integral to investments

Investments are forward looking, but they also call for learning from past blunders and changing situations. It is also important to take stock of investments at regular intervals. Over time, some of them may lose their shine due to various reasons while new themes may provide better value propositions by making the most of the conducive environment. The changing scenario may call for a portfolio reshuffle and revised asset allocations with fresh ‘buy’, ‘sell’ and ‘hold’ implications.

Engage a financial advisor

Good investing opportunities abound at all times, whether bull runs or bear phases. A competent advisor studies your life goals and helps you with disciplined and diversified investing in line with income profiles and risk appetites, making the most of market trends and sunrise opportunities.