Investment Plans for Newly-wed Couples
Last Updated : March 12, 2022, 6:39 p.m.
Life takes a different and interesting turn after marriage – the happiness of having got a life partner with whom you can share everything. May that happiness be forever for couples in financial terms too. Investing in the right place and for the right time can help ensure the same. And as the situation demands, the couples must not hesitate to change their investment plans either. Staying flexible will help them prevail through different times. So, how should the newly-wed couples proceed with investments? Let’s find out!
Investment Plans Newly-wed Couples Should Make
As mentioned above, flexibility holds the key to a successful financial journey. So, choosing the right investments and assessing them periodically should be the way forward for couples. On top of that, knowing beforehand the investment risk the couples can afford would help them select the right financial instruments. Let’s know in detail the investment strategies couples should employ to stay on course.
Make Investment Plans Based on Risk Appetites
Correctly assessing your investment risk appetite will help you figure out the instrument where you should put your money. In your younger days, your risk appetite will be more. So, look to invest predominantly in equities to raise your capital exponentially over time. Market fluctuations affecting your investment value in between should not bother you if you’ve chosen the right stocks for capital appreciation. The investments will soon recover as the markets go up. A forward-looking approach wherein you take the mini-market falls into your stride and move ahead with confidence is required.
How Should Your Asset Allocations be?
Having all your money in one financial asset is not advisable. Financial advisors call for diversification of investments for a smooth-sailing experience. You may come across times when there’s a broader fall in the stock market due to uncertain economic, political and international developments. For instance, during the ongoing Russia-Ukraine war, stock markets have closed in Red mostly. So, your investment portfolio should have space for debt instruments and bank deposits too. Of course, equities should account for around 80-90% of your portfolio early on. But with some in safety nets only helps ensure that flexibility you need during market falls.
Should You Change Your Investment Plans Later on?
Risk appetite only wanes with time. So as you reach your late 40s or early 50s, look to withdraw some from your equity holdings and keep the same in your bank deposits. Alternatively, you can think of changing the portfolio allocation at such times. Reduce your equity portfolio by around 5-10% and increase your exposure to relatively safer instruments by the said proportion. Let that be maintained till retirement.
How Should Couples Invest After Retirement?
Retirement allows couples to spend more quality time together. But even at that stage, investment discipline needs to be maintained to live the remaining years peacefully together. Of course, you will have the retirement kitty ready with you. But the likely lack of regular income at that stage would prompt you to go for investment plans offering you the same. So even though your risk appetite may taper off substantially at that time, a good chunk of equity investments is still advisable. Products like mutual funds come with a Systematic Withdrawal Plan (SWP) wherein you need to specify a predetermined amount you want monthly. The amount you specify will come to your bank account every month and help you maintain your lifestyle. Besides equities, you can put your money in bank and postal deposits too for diversification.
How to Make Equity Investments?
You can buy stocks directly or through mutual funds. Those who can make smart decisions regarding which stocks to buy, which to sell and know the right time for both should invest directly. Others should invest in mutual funds where fund managers help solidify your investment portfolio. They choose and sell stocks in the portfolio based on the prevailing market conditions. Their market expertise should help you make the most of good times and reduce the losses in adverse times. In case the funds you choose don’t perform for long, choose some others that may have done well.
Do Check the Investment Calculators Before Planning
Achieving your goals depends on how you plan. Checking investment calculators beforehand is one of the best ways to plan for the future. See how much you and your spouse need to invest together to achieve the goal corpus at different stages. In the case of a sole breadwinner, the investment amount required will be more. So, if you can spare only INR 5,000 instead of INR 8,000 which is required as per the calculator to achieve the required amount, think of hiking your investment amount annually. You can use your annual appraisals to do so.