We believe 3 things are to be taken care by any individual:-

v  Safety of self and family

v  Safety of money

v  Growth of money

Safeguarding your interest i.e. Safety aspect is more important. Once that is ensured, Growth of your money is the next consideration.

Safety of self and family – Ensure you have adequate Life Cover, Medical Cover and Accident Cover.

 Insurance should be an important part of your savings portfolio. Because in the event of any misfortune, a well-planned life insurance can protect your loved ones from financial difficulties.

As a thumb rule your life cover or term plan should be at least 8 to10 times of your Annual Income or it should be considering your Human Life Value i.e.  Considering the earning potential of future income in remaining =years of your working life.

Secondly it includes health cover which provides cover against major health care expenses in the form of fixed pay outs on hospitalization or a lump sum on diagnosis against some specified critical illnesses.

Lastly safety includes an add-on cover of accidental benefit over a basic policy which pays an additional sum assured to the beneficiary in case of death due to accident.

So it is a humble request, please check your insurance needs on the above basis

Next Safety of your Money: – It simply means that when you require money you get the amount what you want i.e. no loss of capital. It has to be seen in time perspective as one has to be well prepared for expenses which are in near times and one cannot take the risk of any loss. So this is again looked from two perspective (1) Sudden (2) Expected expenses.

Sudden – Any emergency or unexpected need. Choice of investment is Liquid fund or money in SB Account. As far as quantum is concerned it should be 0 – 3 month of monthly expenses. We do not consider it as investment as return is not at a consideration .

Expected Expenses – Two major consideration (1) idea of any planned expenses e.g education fee , wedding cost in family , holiday etc falling within 3 years  (2) dependent on that money to run family expenses if required or say if worse situation arises due to loss of job .Here apart from return safety, income and regularity of cash inflow are major consideration. This just gives mental comfort and makes one tension free even if facing with worst financial distress. The investment suggested is Debt (Income fund / FMP /Fixed Deposit).

Amount in debt fund to be tension free (a thumb rule — 36 month of monthly expenses apart from any planned expenses. It can go up to 60 month for those who are more conservative but not suggested beyond that as return from equity will always be better than debt after that. )

 An Illustration:

If you are already done with this then any fresh investment has to see growing.

Growth of Money — Now anything after taking into account of Debt comfort level part (cash + income) your further investments should be put for growth and that can come only from Equity and related asset class which is PMS, PE, Real Estate Fund etc . Why Equity? Because in longer time duration return from debt is not so high vis a vis return from equity funds. So put your incremental money for investment in Equity MF.  5% of your total investment should be Gold either in ETC or as hard metal or in ornament form and 5 % in Infrastructure (MF or Bond) with 10 year investment horizon. If you have total portfolio in crores then can also look for PE/PMS for still higher return but investment horizon has to be > 5 years.

Pl remember any fresh investment has to be viewed in terms of total investment portfolio you have an incremental investment should go as per above logic and not based of fear or inducement as per current situation. (e.g. – If someone has total investment of say 50 lakh and all in debt and now has some 5 lakh to invest then in today’s situation he will be tempted to invest for debt again whereas he should go for equity mf as he is already in more than required safer zone and need to put his some money for higher return but with long term perspective)