Posted on: Jun 12,2018

A Guide to Financial Investments through Different Stages of Life

What are the Different Stages of Life?

  • Unmarried
  • Married
  • Married with Children
  • Retirement

Factors Influencing Investments

  • Age: When you are young, you are capable of taking more risks; hence, this is the perfect time to plan for finances and investments. Since you share fewer responsibilities at a young age, you will possess a handsome amount to invest in the later stages of life.
  • Savings: Building up your saving funds is very necessary when you start to earn money. Remember, you should always have a good amount of money as savings to cater the most immediate cash needs. Plan your budget and invest accordingly because it will help you achieve a healthy saving amount.
  • Income: Well, how much do you attract a month? Speculation of financial nature requires surplus of cash, and without drawing income you will not be able to invest at all.
  • Market Trends: Investments are for the most part influenced by the market trends. Depending on the demand of investment in the market, the worth of an investment is determined. You must read and research on the markets before you begin with your investment plan.

Life Stages and Investments

Mentioned below are the different life stages and the factors to consider before investing monetarily.

1. When You are Unmarried

When unmarried, keep the following things in mind in order to plan your investments

  • Less Financial Dependents: When you are unmarried, you don’t have spouse and children to support. Hence, there are very few people who would be financially dependent on you. Thus, you have the freedom to spend maximum of your income on yourself in the form of healthy investments.
  • Age: At a young age, you hardly possess any responsibility, thus you can invest with moderate to high risks investment plan.
  • How much should you invest: Since you are unmarried, you can invest almost 60-70% of your income.
  • Long-term Investment: If looking for long-term investments, you can chose safe long-term investments of 10-15 years.
  • Equitable Investments: Investing in bonds, mutual funds, life insurance, stocks and public provident fund will prove fruitful for you at this stage of life.

2. When You are Married

Since you have your better half with you, you need to carefully proceed with your investment plans and strategies.

  • Financial Dependents: When unmarried, you had to look after yourself and your family, but once you get married you have to look after your spouse as well.
  • Upswing in Expenses: With an additional member in your family, you will experience an upswing in your expenditures.
  • Medium-Risk Investments: Since your married life is a new dawn for you, alterations in your investment strategy will be suitable for your life. Hence, you should look for the investments with medium risks and high returns.
  • How much should you invest: Now, since you are married and possess additional financial responsibilities, you should not invest more than 30-50% of your income.
  • Monetary Liquidity for Expenses: Since you owe the responsibility towards your family and wife, you will have to increase financial liquidity so as to override any kind of financial emergencies.
  • Fair Investments: Well some of the fair investment deals at this stage of life include health insurance, mutual funds, real estate, debt instruments and equities.

3. When You Become a Parent: It is not all about you anymore.

Becoming a parent is a tremendous experience and you need to restructure your investment plans accordingly.

  • More Financial Dependents: Your financial obligations will tend to increase with an addition of a child or children. Since you need to take care of your children also, hence you will have more people financially dependent on you.
  • High Expenditures and Less Savings: Once you enter parenthood, your expenditures to care for your kids and their education coupled with some more monetary responsibilities will bring a surge in your expenses, leading to lower savings.
  • Low-risk Investments: Since you will have the responsibility of the entire family, you may need to pick less risky investments, but these will offer you low returns.
  • How much to Invest: After figuring out all your financial commitments, it is recommended you  invest almost 30% of your income.
  • Where to Invest:  At this stage of life, the right investments for you would be the health insurance, life insurance, child plans, pension plans, gold and recurring deposits.

4.     When You Retire

Now that you have astutely contributed throughout your life, the retirement period of your life should not be of much worry.

  • Avail returns on Investments: The returns you will get after investing over the years will help you manage all the financial roller coasters very easily. Now, this will be the time when you will earn rewards from the smart investments you made earlier in your life.
  • Liquid Funds to Pay for Expenses: Now at this stage of life, you need to have more liquid funds in order to pay for all the daily expenses.
  • How much to Invest: You can save almost 20% of your savings, income or the pension you receive.
  • Short-term Investments: During the retirement days, you may invest in short-term investments than those of long-term investments.
  • Right Investment: Some of the right investment plans during the retirement period are fixed deposits and senior citizen saving schemes. 

We hope that our complete guide for speculations through various stages of your life will enable you to plan your investments and ventures  smartly.