It’s your 30th Birthday. Your friends have bought you a birthday cake and lit 30 candles on it. Your friends sing you the famous Happy Birthday as you blow the candles. Time to reflect on this new milestone. You’re 30…Is age just a number?
Don’t take me literally. It’s not time to bring out the weighing scales. You need to find out what you are worth…What you own vs What you owe. Yes, you need to do the net worth check.
Find out the value of everything you own. How much money you have in your savings bank account? What is the value of all your fixed deposits? Do you own stocks and mutual funds? What is the value of your house and jewelry? The job is only half done. You need to subtract all your loans from your net worth. You get a rough idea of your net worth.
You then take your annual income (salary and other income you earn) and separate your annual expenses (food bills, children education bills) and so on. You add this money to your net worth each year.
Remember: If you have to repay very large loans such as home loans, car loans and so on, your net worth could be negative.
You need to take a look at the job you are doing. Is your job giving you sufficient income to meet your expenses?
Do your skills match with the best in your industry? Is your salary rising each year?
Your medical expenses at this age, should be very low. You are after all just 30. As you grow older your health expenses will increase. If you are 30 years and single, you must avail an individual health insurance plan. If you are 30 years and married, you must avail a family floater health plan. This health plan, takes care of your and family medical expenses, in case of a medical emergency.
Life is full of emergencies. You need to be prepared for them. You must have read about the recent floods in Chennai. You need to set aside money for an emergency. Maintain at least 3 to 6 months worth of living expenses, in an emergency fund. Do not touch this money, unless there is a real emergency.
If you lose your job, this money will come real handy.
You are just 30 years and if you are unmarried, you can afford to take risk in your investments. High risk for high returns. Invest in equity (equity mutual funds and shares) and stay invested for a long time. If you invest in equity, stay invested for at least 7 years. You are sure to get good returns. Don’t invest all your money in equity. Invest part of your money in fixed deposits, public provident fund and also tax saving bonds. These are safe investments but give you low returns.
Your 30 years is not just another milestone. It is time to reflect, where you are and where you want to be in life.
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