Professional & Salaried

Investment Guide For Professionals & Salaried People

  • Wealth Creation
  • Initiate Early
  • Markets
  • Mutual funds  

Wealth Creation

You should save regularly and invest wisely to beat inflation and to improve your standard of living.

Our forefather believed in “income - savings = expenditure”.
Next generation believed in “income – expenses = savings”.
Few of us today believe in “income + borrowings = expenses” (No savings - Red alert situation)

Rationale today is:

“Income – Investments with planning = Expenditure”
There is no other alternative available for investing wisely.
For a young generation today that has grown up in a favorable market condition, where human wants are increasing and huge opportunities are available to spend, just earning good is not enough. What is equally important is to save regularly and invest wisely. This will ensure that your money should work as hard as you do.

Three things to keep in mind:

1) Savings:

As discussed, to save regularly is very important so don’t use your savings to fulfill your day to day expenses as others do, as this will take you to the situation where your future will be horrible.

2) Investments:

You should start investing to fulfill your long term and big financial goals. We can’t deny that higher the risk we will be looking for, higher is the risk involved. But you should always remember one thing that you should invest in risky asset class only when your horizon is longer.

3) Inflation:

Let’s go through some facts and figures.

Reasons for investing:

  • You must invest to fulfill your dreams,
  • to fulfill your responsibilities and
    • to live a happy retired life.

So what to do?

Just down your short term goals which you need to fulfill in near future. e.g. buy a house, buy a car etc. Same way jot down your long term goals which you need to fulfill after a long. e.g. son’s higher education, daughter’s marriage, your retirement etc.

Don’t forget to have a deadline for every goal as without a deadline every goal is just a dream. Your work is not over yet because you need to review your investments periodically.
To plan for your retirement is very important because in the modern times where medicinal science has improved drastically, man is going to live longer and careers are becoming shorter. In this scenario you will definitely need financial independency and for that at the time of your retirement you need reasonably big corpus.

In today’s fast paced world, it is not uncommon to come across the situations where savings and investments  happen haphazardly, where you take an insurance policy only because agent has been after you for so long or you make a tax investment on impulse because your organization wants to know if you have done it etc. Here it becomes imperative to look for help.

We will have only ourselves to blame if we don’t plan and accomplish a secured financial future.

Initiate Early

Advantages of an early start (Power of compounding)


“Well, I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. It’s pretty easy to get well-to-do slowly. But it’s not easy to get rich quick.”

Let’s take some examples to understand
Example 1:

1.  A & B are of the same age!
2. A starts investing Rs.10000 every month Or Rs.120000 per year at the age of 25 and stops at the age of 35 i.e. he invests for 10 years. His total investment is Rs.12.00 lacs. He remains invested up to the age of 65.
3. B starts investing Rs.10000 every month Or Rs.120000 per year at the age of 35 and continues to invest for 30 years i.e. he invests for 30 years up to the age of 65. His total investment is Rs.36.00 lacs.
4. Who will have more money at the age of 65 assuming the rate of return on their investment is 12% p.a.
5.  Value of Investment of A would be Rs.Rs.7.06 crores (original investment Rs.12.00 lacs) while that of B would be Rs.3.24 crores (original investment Rs.36.00 lacs)

Example 2:

Lessons to learn:

If given time, money can do wonders. So don’t procrastinate and start investing today. Small change in a rate of return can make a big difference in long run. You can select riskier instruments to invest like equity mutual funds as in a long run it can create huge difference and will give you inflation proof returns. Even because of a long tenure risk smoothen out.
The key to reap most out of your investments is to have disciplined approach. Invest regularly to get the best bang for your money.