Guest Lecture by Mr. R. Balasubramanya

Prominent Points Discussed in the Lecture are as follows

• To have a proper planning regarding income, expenses and savings which will help in building the corpus for the future.
• Invest your money in asset classes which have a lock in period like PPF, EPF etc.,which will help in growing the money without hindrance. Additionally, they also provide for tax benefit.
• An emergency fund should be created equivalent to six month’s income.
• Insurance policy is very important and should be taken for the age between 30-60 years. Only term plan and medical health insurance should be taken Endowment fund and ULIP pans should not be taken as they mix investment with insurance and give very less IRR.
• Basically there are four types of asset classes i.e., Debt, Gold, Real-estate and Equity. Proper diversification of assets should be there.
• Equity Linked Saving Scheme is a good way to invest in equity mutual funds as it helps in saving tax under section 80C.
• For considering a mutual fund three factors should be especially considered i.e. Fund return, standard deviation and sharp ratio.
• For investment in real estate a plot of land is better as compared to a constructed property or apartment as scope of growth is limited in a constructed property.
• A person should try to develop a passive source of income.
• Some thump rules like “100-Age” should be invested in equity, rule of 72 etc. were discussed.
• A rough idea of the amount of corpus a person should have at the time of retirement is 400X where X is the monthly income of a person.

Diversification of asset class varies from a person to person but ideally a person should not have more than 15% of his income in Gold because metals are dead assets they don’t give recurring income. For equity it is around 20-25% and can increase for an aggressive investor.