Investment Planning

                  Many of my blog readers have asked me about the investments, how should they allocate or invest their money? I am still a student and learning all these but I am trying my level best to answer this question. As I always say that investments and savings are very essential and everyone should practice it. Here the main question is “How much to invest/save and where to invest/save?”

In my opinion there are 3 types of person in this world-

1. Spend more than they earn
2. Spend all their income and save if there is any balance
3. . Save first then spend the rest

                  Type 1 and type 2 belong to unsystematic type of people and most of the time only live by today freely. These types of people should set up a systematic saving program no matter how small the amount might be. Start from a very little saving like Rs. 1 a day in the piggy bank. Whenever you start to feel the habit of saving and getting use to it, increase the amount to Rs. 2 a day or even Rs. 100 a month or even more than it.

                  People belong to type 3, in an ideal case, should save at least 50% of their total income and spend the rest on their living expense. But if you can save 30% of your total income and spend the rest, then also you will be in safe side.

Following are some tips to allocate this 30% of your saving-

1. Save 10% for liquidity meaning in banks or other safe instruments where you can withdraw your money for emergency or during retrenchment.
2. Save 10% for investment. This investment can be in liquid asset or fixed asset like -Equity, unit trust, fixed deposit, Property, Art Work, Gold or other Collector's Items.This portion will help you to grow your money to fight against the inflation etc.
3. At last save the balance 10% for your insurance.

                  I think the above tips will help you to allocate your money in a smart way. There can be various other ways to invest your money, follow anyone but make sure that you are doing it very intelligently.