One pager financial advice for a 24 year old
When I was 25, I read a blog post from Matt Cutts. It taught me
the basics of personal finance and helped me plan them well. In
this post I’m going to endeavour to do the same. Some quick, simple,
no ifs financial advice for a 24 year old Indian.
1. Pay off your education loan if you have one
2. Start a tax saving SIP in a MF ASAP
3. Max out your PPF account
4. Put 3 months of expenses in a fixed deposit
5. Get medical insurance worth at least 3 lacs
6. Buy term insurance (preferably LIC) if you have a
family to support
7. Follow a 70%–30% allocation in equity and debt
respectively. Preferably invest everything remaining
after PPF in equity via MFs
8. Rent a house for as long as you can. Buy only once
income growth is strong.
Here is why I suggest these things. The longer lock-in for PPF
accounts ensures that your money isn’t spent on non-essential
consumption. Medical insurance ensures that a single event
doesn’t wreck your finances. Life insurance (get term only — say no to money back policies) ensures your family has support in
case of an untimely event. Starting an SIP helps you get started
with mutual funds. I’m suggesting just 3 months of expenses in
an FD — you can always fall back on parents in India.
If your situation is more complex, you can consult a tax or
financial advisor on platforms like Cleartax. One simple
principal that has worked for me — invest and forget about it. It
helps your returns compound over the years and reduces the
stress of managing money.
If you found this helpful, please like this post and share with
your friends.
Please note that I’m not a qualified financial advisor and please
do your own research for your specific situation when using this
advice.
