Here’s how to invest your extra income

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Sometimes when financial goals are already on track, investors often don’t know how to invest the excess money in their hands. “It may sound absurd to some, but such cases often occur when disposable income is high. And the best way to handle that is to further secure your goals financially, ”suggested Suresh Sadagopan, Sebi registered investment advisor and founder of Ladder7 Financial Advisories.

For example, one may have already estimated the cost of the goal of educating one’s child by assuming that he could pursue engineering or medical studies at a particular institution, ”Sadagopan said, adding:“ But, in fact, he could take other courses. it is more expensive than what has been estimated. “

If there is extra money to fund the course, there is no need to resort to an educational loan in such cases.

Likewise, for retirement, people save for the goal based on future assumptions such as interest rates, inflation, etc. However, these factors may be different from our assumptions. Therefore, it is always better to have a larger corpus.

“If the corpus is larger enough than what is needed, then it can be used to achieve other goals after retirement, such as travel. Or, he can even plan for early retirement if he wishes, ”said Arijit Sen, SEBI registered investment advisor and co-founder of merrymind.in.

Another factor to consider here is the medical emergency. “Such requests can arise at any time and we must be well prepared for it. “

Here’s what not to do:

To begin with, we need to be careful that even though there is surplus money, there is still our hard earned money. Therefore, we shouldn’t experience it or try to invest for a thrilling experience or try something we don’t know, Sen said.

Even if you want to invest in stocks, there is a good way to do it.

Here’s what to do:

If you don’t have a financial goal right now, you can always create one. For example, double your money. As if you were investing ??20,000 per month at 12%, then your money will be doubled in 10 months.

So if you set similar goals like this, the money will be channeled appropriately.

Transmit an inheritance:

Wealth is often created for the purpose of passing on a heritage. But, the corpus is usually transmitted after the parents are dead or really old, such as when they are 80 or 90 years old. ??5 crore to come at this point won’t help them much, Sadagopan added.

Instead, if you help your kids in their 20s and 30s when they are really struggling, it can make a real difference in their lives. Since you can help them with their higher education or finance the down payment on their house, etc., the same would mean a lot, he added.

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