Do you want a simple investment plan?
Here is a rock solid 9-point plan suggested by Scott Adams, the creator of Dilbert comic series (source). It’s written for US investors. But it’s still good to read.
Inspired by this, I will share my own’ short plan’ later in this post.So read this one first:
So read this one first:
Now let me get inspired… 🙂
Here is a 209-word financial plan that is more relevant in the Indian context.
209 Word Financial Plan
- Buy term insurance. Never buy endowment / moneyback policies.
- Buy health insurance for you & family; even if employer-provided. Or atleast get a top-up cover.
- Build up an emergency fund equal to 3-6 months’ expenses. Use savings account, liquid funds and FDs.
- Buy a house if staying for long and affordable. Don’t go overboard with loan. Keep regular EMIs below 30% of your income.
- Prepay the loan as soon as you can.
- Make a will.
- Don’t delay retirement savings. Divide your periodic investments 70% equity and 30% debt.
- If mandatory debt investment like EPF doesn’t amount to 30%, use PPF and debt funds.
- Rebalance annually to keep allocation at 70-30 (Equity-Debt).
- Use major chunk of annual incentives to prepay loans.
- Increase investments with salary hikes.
- Keep a credit card. Pay it on time and in full. If you can’t, then dump it.
- Teach your dependents about money and how insurance works and who to contact if need be.
- If you have special goals (retirement, children’s education planning, etc.) or all this confuses you, hire a trustworthy + competent financial advisor. Few important pieces of financial advice can offset many years of fee charged by advisors.
That’s not as concise as Scott Adams’ plan but I think it covers most of the important aspects.
Hopefully, it was helpful. 🙂
And here are links to other articles that address few of the above-mentioned points:
- Why you shouldn’t buy Endowment and Moneyback insurance policies?
- How much Life Insurance to Buy?
- 20 Term Life Insurance questions answered
- The tragedy of being Under-Insured
- Ensure your close relative to get insured too
- Portfolio to ensure life doesn’t F*** you!
- Surprisingly, Health insurance protects your Wealth & not Health
- Future Horror of Healthcare Inflation
- Choosing & managing a Home Loan correctly
- Home Loan Tax Benefits – How much do you really get?
- How much Home Loan to borrow?
- How shorter home loan tenor can save you tons of money?
- Loan-free Life Anyone?
- Portfolio Allocation for young investors
- PPF Corpus Calculator – FREE Excel Download
- Saving Rs 1 crore using PPF
- Running out of money before years
- Your children are not your retirement fund
- Goal based Investing
- How to find your real financial goals?
- Goal Setting Worksheet (FREE)
- Financial Planning