I am a 29-year-old Central Government employee with ₹65,000 salary per month. I have one Term Life of ₹50 lakh, NPS balance around ₹12 lakh, one PLI endowment policy of ₹10 lakh. Apart from this my MF corpus is of ₹1.25 lakh at present with an SIP of ₹2,500 per month. I availed a personal loan of ₹7 lakh a year ago. My marital status is single and total monthly expenses including for family is around ₹45,000 per month. Please guide me to decide whether it is advisable to go for one more Term life or endowment policy. Also, which is better to invest in — ELSS or PPF — and whether my present SIP is sufficient to generate a total corpus of ₹10 lakh in 10 years’ time.

Brijesh kumar Rana

Consider upping your term insurance once you know your commitments post marriage. Make sure it covers all loans and possibly leave a reasonable sum for your family for the next 5-10 years if they lose your income in the event of a mishap. Endowment policies, even if it is from Post Office, do not earn high returns and it is best that you surrender once you cross 5 years. Add that sum to mutual funds. Use simple index mutual funds such Nifty 50 and Nifty 500. We do not know what sort of mutual funds you have invested in. But considering a majority in equity, if the present corpus of ₹1.25 lakh plus the SIP earns 11% IRR, you might reach about ₹9 lakh. So, you definitely need to increase your SIP by another ₹1,000 per month now and increase it even more later.

This is regarding my friend. She lost her father 3 months ago. He was the sole bread winner. Now, she is earning ₹80,000 per month and has a corpus of about 10 lakh. Her short-term goal is to save for her marriage which she is anticipating in 2.5-3 years. Please suggest what she can invest in.

Sindhu Priya

Given the short duration, it is best that she invests in deposits in a large bank and less than ₹5 lakh in a small finance bank. If she does not have experience with mutual funds, she may be better off with these alone. Otherwise, she can also start saving in a class of hybrid mutual funds called balanced advantage funds, with a monthly SIP in addition to the deposits. We would not recommend equity funds for the short timeframe she has.

I am currently 17 years old and I need suggestions for long-term investing. I look forward to doing some stocks as well as trading and I need help in both mentioned above. I really look forward to hearing from you.

Alfred Shaju

AIt is good to know that you want to learn how to manage your money early on in life. But make sure you do it slowly and steadily and taking small steps at a time. Directly doing trading may sound very fancy, but it is not the right choice for beginners in our view. You can start investing small sums in simple and good products like PPF and bank deposits. You can then learn a little more about money and investing by reading. You can consider reading books such as ‘Let’s Talk Money’ by Monika Halan and You can be rich too: With Goal Based Investing (P.V. Subramanyam and M. Pattabiraman) to know the basics of money and financial planning. You can go to mutual fund websites to know the basics of mutual funds. Once you understand this a bit, you can then try to read about how stock markets work and how to understand a company’s financials and business prospects.

Regularly read business news through business newspapers or business news websites. Importantly, do not get too swayed by the ‘easy money’ talk that you will hear all around you, especially in social media. Listen to audios or videos about stock markets, but remember, like any other journey, the financial journey also takes time to travel.

(The writer is co-founder, PrimeInvestor.in)

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