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Single

If you are a Single person the financial advice in the interaction below will help you understand your Life stage goals and financial events and how you can start planning for the same.

Just follow these 4 simple steps:

Nilesh, a software engineer, got into one of the leading IT companies through campus recruitment. Since he was single and had a surplus amount of money, he thought of streamlining his finances.

His interaction with his Relationship Manager (RM) set him off on his financial journey.
Nilesh started by asking his RM on how he could help him...

Nilesh: I wanted to understand the details of creating a financial plan. I want to know what you can offer me.

RM: Sure Sir, I will help you understand where you are currently, what you need to do to achieve your goals, how you need to go about managing your savings and investments, your risk profile and risk-taking ability and recommended asset allocation model.

Single

Nilesh: OK. I think now is the right time to start planning my finances for the future. Can you help me with that?

RM: Sure Sir, Now is indeed the right time. The sooner you start planning the better it is. To help you plan, I need to know some personal details. Are you fine with it?

Nilesh: No problem. Go ahead.

RM: Do you plan to pursue higher education?

Nilesh: Yes, I would like to study further. I am thinking of working for a few years and later on pursue MBA.

RM: That's a good approach. Save enough money by investing in high-returns asset classes like equities to form a corpus for your studies. This way you can fund your own education. In case you plan to study abroad, you will have to provide for the travel and accommodation and so start saving accordingly.

Nilesh: Yes, that's right.

RM: Do you own a house?

Nilesh: No. Currently, I am staying with my parents. I want to buy a house by the time I get married.

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Single

RM: Right. You will need to make enough savings for both these events, i.e. marriage and buying a house. Saving a sufficient amount for marriage will reduce the financial burden on your parents. Buying a house is also an important financial task. You will have to save enough money to pay for the down payment. Invest regularly, even though they are small amounts.

Nilesh: Once I manage to purchase a house, I also want to buy a car.

RM: Since you plan to buy a car, you will have to arrange for the down payment. The rest of the money can be arranged through auto loans. So keep investing regularly.

Nilesh: Do you think I should invest in insurance?

RM: Since you are young and single, you need not worry too much about investing in insurance. You can invest a small amount in insurance, but your main investment should be into equities. As a general thumb rule, desired allocation to equity can be calculated as 100 - age. So, since you are 25, the ideal allocation of your investible surplus to equity can be around 75 percent.

Nilesh: OK. I didn't know this.

RM: You should also save some amount for the long term. Even if you invest small amounts, you should do it regularly. This way you can save a sizeable amount for your retirement. The earlier you start investing the greater amount you will be able to accumulate. That is the power of compounding. Thus you can lead a comfortable and peaceful retired life.

Nilesh thanked the relationship manager for helping him formulate a good financial plan, keeping in mind different needs that will arise in life.

Single

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