Full and Actual Question: I am 32. One child. Salary is 36K. Saving 12.5k in public provident fund. Paying 12.5k for a loan. I want to invest other 10k, but how?
Answer:
You
seem to have an investible surplus of Rs.10,000 per month which is quite decent.
Your present age of 32 also very good with an active investing life of about 33
years and another 10-15 years even if you do not invest you may keep alive your
past investments. It would have been much better had you asked this question
when you were 22 years old. Anyway, let us keep a target of about 85 years as your
investment life, which is simply superb.
Try
to get rid of your debt repayment obligation of Rs.12,500 per month as soon as
possible and after that try to avoid borrowing money. Please destroy the credit
card(s), if you have any, immediately.
I
am surprised to see that there is no significant allocation for home expenses?
Perhaps your spouse is taking care of them?
Open
a SIP in a well-diversified index mutual fund or invest in an Exchange Traded
Fund (ETF) for the next 33 years. Do not stop this investment for any reason
whatsoever. See below what magic the ‘Miracle of
Compounding’ can do for you.
 |
| Example Showing Investment Results in 33 Years |
If you follow this simple advice keep invested
for the time frame suggested, when you look back at the age of 65 you would
have accumulated a net wealth of Rs.7.92 crores, after an assumed annual
inflation of 10%, which is very high and long term stock annual market returns
of 15% which is very reasonable.
If you keep the investment alive, without disturbing for another
20 years, you would have become a really rich and wealthy person with a net
wealth of Rs.98.61 Crores.
Happy Investing and Getting Rich Soon!
