🔍
The BEST INVESTMENT portfolio for YOUR AGE! | Investing for Beginners | Ankur Warikoo Hindi - YouTube
Channel: unknown
[0]
According to your age,
[1]
what should be your investment mix?
[4]
We’ll get to know in this video.
[15]
Friends, this is a question
[15]
that a lot of people have asked me,
[17]
I am 25 years or 35 years or 40 years old,
[22]
but I haven’t started investing yet,
[24]
so what should be my investment approach?
[26]
What should be my investment mix?
[28]
There are stocks, fixed deposits,
[30]
corporate bonds, gold,
[32]
real estate, crypto too.
[34]
What should be the mechanism
[36]
to evaluate all of them?
[38]
And what should be their share?
[40]
In this video, I’ll try to
[42]
answer all of these questions.
[43]
Basically, 3 questions.
[45]
Number 1, irrespective of your age,
[49]
what are the things that
[50]
you have to bear in mind
[52]
before you even start investing?
[54]
Number 2, how to make an emergency fund?
[57]
And what’s the approach for it?
[58]
Finally, number 3,
[59]
how much should be your investment
[63]
approach, and what should be its mix?
[66]
Number 1, before starting investing,
[68]
no matter what your age is,
[69]
be it 22, 32 or 50,
[73]
there are 2 things that you need to have.
[75]
And I talk about this often,
[77]
but it never harms to repeat it again.
[79]
Number one is health insurance.
[81]
Health insurance for your family
[83]
and for your parents.
[85]
Your parents’ insurance should be
[86]
separate from your insurance,
[87]
as they’re old, their health insurance
[91]
would be more expensive,
[92]
and if you club your parents
[94]
with yourselves, then their highest age,
[97]
whoever it is, your mother or father,
[99]
your price will be according to their age.
[102]
That is not a smart thing to do.
[104]
So, have a separate health insurance
[106]
for your parents.
[108]
And for yourself and for your family,
[110]
if you are married or you have kids,
[111]
have a separate health insurance for them.
[113]
That is a necessity.
[115]
In the past two years,
[116]
the things the world has seen,
[117]
hopefully, through that,
[118]
you may have realized,
[119]
health insurance is very, very critical.
[123]
Number two is life insurance.
[125]
God forbid if anything happens to you,
[126]
and you are the earning member of
[128]
the family, and the only earning member,
[130]
then you don’t want that when
[132]
you are not there and the income stops,
[133]
your family should suffer at all.
[136]
So, for them, financial security
[138]
is very important.
[139]
Take life insurance.
[140]
Term plan is the best plan,
[142]
where you could give the lowest premium,
[144]
and get the highest coverage.
[146]
Whatever is your annual income,
[147]
20 or a maximum of 25 times of it,
[150]
should be your term insurance cover.
[152]
So, if you earn ₹5 lakhs,
[154]
then a cover of ₹1 crore,
[156]
ideally, a cover of ₹1.25 crores.
[158]
And these two things are critical,
[160]
before you start any investing journey.
[163]
After this, comes an emergency fund.
[165]
An emergency fund is for, God forbid,
[168]
if your income stops
[169]
for a short period of time,
[171]
maybe you have been fired from your job,
[174]
or you are on a sabbatical,
[175]
or if you have undergone an operation,
[177]
or if you have an illness,
[178]
or because of a family situation,
[180]
you had to stop working,
[182]
whatever the reason may be,
[183]
there's an unpredictable emergency.
[186]
You need to have money at that time.
[189]
The minimum emergency fund amount or size
[191]
should be six months
[193]
of your basic monthly expenses.
[195]
And ideally, 12 months
[197]
of your basic monthly expenses.
[200]
What are basic monthly expenses?
[202]
The things that are your needs.
[204]
Your rent, EMI, food expenses,
[208]
electricity and water bills,
[210]
the things that you need, not desires,
[214]
not even investments.
[216]
Just your basic needs.
[218]
Six times of it is the minimum,
[220]
twelve times is the ideal.
[221]
You will first build the emergency fund.
[224]
Forget about investing,
[225]
because an emergency can come
[227]
unannounced at any point in time.
[229]
This emergency fund is
[230]
divided into three parts, 70-20-10.
[233]
70% of this emergency fund
[235]
should be in a fixed deposit.
[237]
A fixed deposit is an excellent way
[239]
to protect your money, not to grow.
[242]
You must know this if you watch my videos.
[244]
So, in a fixed deposit,
[245]
put 70% of this money.
[247]
Ensure that anywhere,
[250]
whatever fixed deposit you use,
[251]
you don’t need to pay any penalty amount
[254]
on its termination.
[256]
20% should be in your bank account.
[259]
It’s in the savings.
[260]
Yes, the money is rusting there at 2%,
[262]
but that's the basic need for
[263]
an emergency fund.
[265]
Don’t worry about it.
[267]
And then 10% should be liquid cash
[269]
at any point in time at your home itself,
[272]
if the need arises.
[275]
That should be the split
[276]
of the emergency fund.
[277]
And with the life insurance,
[279]
and health insurance,
[280]
and the emergency fund,
[281]
you are now ready, my friend
[282]
to start your investing journey.
[285]
To invest, the basic rule that is used
[287]
is called the 50:30:20 rule.
[291]
Often, when people think about investing,
[293]
they think what’s the point of investing.
[295]
We are 25 or 30 years old,
[298]
it’s time to enjoy life,
[300]
we’ve started earning money,
[302]
we want to buy good clothes,
[303]
we want to party,
[304]
we want to go on a vacation,
[305]
we want to buy a car,
[306]
we want to buy a phone,
[307]
if I put all the money into investing,
[309]
then we’ll have all the money
[310]
when we get old, what’s the point of it?
[311]
When we won't have teeth,
[313]
no strength, no body,
[315]
what are we going to do with this money?
[317]
Absolutely.
[319]
This is where budgeting comes in.
[321]
Budgeting allows you,
[322]
to have segregations
[324]
for each and every purpose of your life.
[326]
The 50:30:20 rule says,
[328]
whatever your monthly income is,
[330]
50% of it, 50% and no more
[333]
should go towards your needs.
[337]
Your EMI, rent, clothes, food,
[341]
by clothes I mean the necessary clothes,
[344]
not the party clothes,
[345]
food, electricity, school fee.
[348]
The basic, basic needs,
[353]
without which you can’t live your life.
[356]
That is where 50% of your amount goes,
[359]
no more than that.
[361]
30% then goes towards your wants,
[364]
your desires.
[366]
It may be your phone, car,
[368]
it may be your vacation,
[370]
maybe your party clothes,
[371]
it may be eating out,
[373]
whatever it is that you wish to do,
[374]
you absolutely should do it.
[376]
But you have to do it within this 30%.
[378]
If this 30% is not enough for that month,
[383]
because you want to make
[384]
a bigger purchase.
[385]
For example, you earn ₹50,000 per month
[390]
after tax and all of that.
[391]
30% of it will be ₹15,000.
[393]
You want to buy a phone,
[395]
phone costs ₹45,000.
[397]
So, you cannot buy that phone
[399]
in just a month.
[400]
So, what you have to do is plan,
[402]
if I can dedicate this ₹15,000 towards
[404]
my desires every month,
[408]
but I’ll stop all my other desires
[410]
for three months.
[411]
In these 3 months,
[412]
I’ll have 15, 15, 15, ₹45,000,
[414]
I’ll buy that phone.
[415]
And after that, the ₹15,000
[417]
that I can still continue with
[419]
whatever wants I have.
[420]
That is how you have to think
[422]
about your budgeting.
[423]
And then finally, the 20%.
[424]
This 20% is the bare minimum,
[427]
that you need to invest
[428]
with discipline every month.
[430]
And there is no escaping this.
[432]
This investment of 20%,
[435]
how should you go about making this?
[439]
What should be the split of it?
[441]
A very important determinant
[443]
of it is your age.
[445]
Your age is a very strong proxy
[447]
for the kind of risk that you can take.
[449]
If you are young,
[450]
you are 20 or 25 years old,
[452]
then you can take a lot more risks,
[454]
this doesn’t mean
[454]
that you are risk-loving.
[456]
This means that, God forbid,
[458]
even if your investments take a loss
[460]
take a loss for short term,
[462]
gets some sort of material impact,
[464]
then you have to time recover from it.
[466]
And that is what is called
[467]
the risk propensity at an early age.
[470]
But if you are already 35 or 40 years old,
[472]
maybe you have a family,
[474]
your needs are more,
[475]
maybe your expenses are more,
[477]
you can’t take much of a risk.
[479]
And, god forbid,
[480]
if anything happens to your investments,
[482]
then you don’t have a lot of time
[484]
to recover from that,
[485]
because your needs will keep increasing,
[487]
and maybe will increase faster.
[489]
So, your age
[490]
is a very important determinant
[492]
of what kind of risk you can take.
[495]
This is not necessary,
[496]
but this is a good guiding light.
[499]
So if your age is X.
[502]
Then, 100 minus X
[504]
is a very important number.
[505]
Because that number tells you,
[507]
how much risk should you take.
[510]
If your age is 25, 100 minus X is 75.
[513]
Then 75% of your total investment
[518]
can go towards risky assets.
[521]
What are risky assets?
[522]
Stocks, crypto, when I say risky,
[525]
I don't mean you are gambling with it,
[527]
that doesn’t mean they are bad assets.
[530]
What it means is that they are volatile.
[532]
They’ll go up and down, up and down.
[535]
But, over a long period of time,
[537]
they are bound to give
[538]
you positive returns.
[540]
So, if you ignore short-term volatility
[542]
or short-term ups and downs,
[545]
over a long-term period,
[546]
you will have healthy returns coming in.
[549]
And then the remaining, if you are 25,
[553]
then 25% should go towards stable assets.
[557]
Stable assets are something
[558]
that give you a predictable return,
[560]
but it would never be an exciting return.
[562]
But, it is required for stability.
[564]
So, be it your fixed deposits,
[566]
your long-term investments,
[569]
national investment plan,
[571]
so on and so forth,
[571]
we’ll talk about all of this.
[573]
If you are 40 years old,
[574]
then suddenly the equation changes.
[576]
Because 100 minus 40 is 60.
[578]
So, you can put only 60% in this risky
[582]
assets.
[582]
And 40% will go towards stable assets.
[585]
Now, what are stable assets?
[587]
What are risky assets?
[589]
How should be their mix?
[590]
Let’s try to know that.
[592]
First of all, we need to save tax.
[598]
The government gives us a lot of chances
[599]
to save the tax.
[601]
And we have to maximize all of that,
[603]
because why should we pay the government
[604]
if that money is ours?
[606]
Then, if the government is allowing us,
[608]
to save on taxes, we have to be smart
[610]
and save on taxes.
[611]
So, you’ll cover the
[614]
the percentage of your
[616]
stable investments with
[617]
your tax-saving plan.
[619]
It may be your EPF, PPF,
[623]
National Pension Scheme,
[624]
if you want to take a little more risk,
[627]
then ELSS means
[628]
Equity Linked Saving Schemes,
[630]
you may invest in them.
[632]
All of these come with a lock-in.
[634]
ELSS, for example,
[635]
comes with a three-year lock-in.
[637]
If you have PPF, Public Provident Fund,
[640]
then it comes with a 15-year lock-in.
[642]
EPF doesn’t have any lock-in,
[643]
but, of course, it has a limit so you can
[646]
only invest that much, and so on.
[647]
But, the idea is whatever
[650]
your stable investments are,
[653]
which is the X, your age,
[656]
you’ll try to cover all of it
[659]
with your tax savings.
[661]
If you have a home loan,
[663]
its interest amount also goes into that.
[666]
The health insurance that you take,
[667]
its premium amount
[668]
gets deducted from this.
[670]
If you take life insurance,
[671]
its premium amount also
[672]
gets deducted from this.
[673]
So, there are a lot of ways,
[674]
we get an exemption till ₹1.5 lakhs,
[676]
so we should apply that.
[677]
And you could get more as the laws change.
[681]
But the idea is,
[682]
that you should absolutely claim
[685]
all tax benefits the government allows.
[690]
Even after all of this,
[693]
if X% of your stable assets
[697]
doesn’t get fulfilled,
[698]
then a good stable asset to buy is gold.
[702]
Don’t buy gold in the form of jewelry.
[706]
Gold is to be bought in gold format,
[709]
and in digital format.
[711]
A good option of that,
[712]
is called the sovereign gold bond, SGB.
[716]
Government announces this every quarter,
[719]
when you buy it then
[721]
whatever gold appreciation is,
[723]
you get it. You get a return of
[725]
2.5% over and above that.
[727]
So, it’s a fairly good
[729]
stable investment to make.
[731]
Gold, I think, over the last 30 years,
[733]
has given an average of
[734]
8-10% return every year.
[737]
So, if you add another 2.5% to it,
[738]
then at 10%, it is a very good
[741]
stable investment.
[742]
And you should 100% go for that.
[745]
Real estate becomes another one.
[747]
But real estate will only be applicable
[750]
if your X is big.
[753]
Which is why I keep saying,
[754]
please don’t make real estate
[756]
investments at a young age.
[758]
Because you don’t have that quantum,
[760]
and it doesn’t give much of a return.
[762]
Real estate never beat the stock market.
[765]
So it is not something
[766]
you should do it at an early age.
[768]
At a later age, when you become
[769]
40 or 50 years old,
[770]
so you have to invest 40%–50%,
[772]
or you should invest
[773]
40%-50% in stable assets,
[775]
because of that, you could
[776]
invest in real estate too.
[778]
Ideally commercial real estate,
[780]
residential real estate
[781]
doesn’t generate much profit.
[782]
In commercial real estate,
[783]
you at least get a rental yield,
[785]
which can help you.
[786]
And that is something which you can do.
[789]
Now, let’s come to high return,
[791]
high-risk assets.
[792]
In high-return high-risk assets,
[794]
the best asset is the stock market.
[797]
You could directly purchase the stocks,
[798]
but that requires a lot of research.
[800]
You may not have the ability to do that.
[802]
Or you can buy a portfolio of stocks.
[804]
In portfolio of stocks,
[805]
there are two options.
[806]
Mutual funds, smallcase.
[807]
Mutual funds are great,
[809]
if you want to track
[810]
the general market or industry.
[812]
So, my desired mutual fund is NIFTY 50,
[816]
India’s top 50 stocks,
[818]
buy an index fund of it.
[820]
There are a lot of options,
[821]
like HDFC, Navi, I think almost
[824]
every bank has a NIFTY 50
[825]
index mutual fund.
[828]
So, you may invest in it.
[830]
SIP is a great idea to do that.
[832]
As India’s stock market grows,
[834]
your investments will also grow.
[836]
Less headache, faith in experts,
[840]
very low-cost investments,
[842]
and very, very good returns
[844]
over a period of time.
[846]
The second is smallcase.
[847]
Smallcase is great
[848]
because it represents an idea.
[851]
So, if you want to buy all the
[852]
stocks of Tata, but you don’t know
[854]
in which form should you buy,
[855]
so you can buy a House of Tata smallcase.
[857]
I, personally, buy the smallcase
[859]
of momentum strategy,
[860]
which ride on the
[861]
short-term momentum of stocks,
[863]
that are increasing, and as they grow
[866]
and they’ll grow a little more,
[867]
before they start dipping.
[868]
So, in that small period,
[870]
they take the bet.
[871]
That gives high returns
[873]
but it is also very risky.
[875]
And I am willing to take that risk,
[876]
because it lies in my 100 minus X%.
[880]
So, these are the ways
[881]
that you can actually invest in
[884]
high-risk high-return equities.
[886]
The other one is crypto.
[888]
Crypto is, again, your personal choice,
[890]
if you believe in it then do it,
[892]
if you don’t then please don’t do it.
[894]
Don’t invest in crypto because of FOMO.
[896]
That is the wrong way to invest in crypto.
[899]
Try to understand
[900]
why you are investing in crypto.
[902]
I, personally, invest in just three coins.
[904]
I don’t invest in any
[905]
meme coins or new coins.
[907]
I invest in the Ethereum,
[908]
I invest in Bitcoin,
[910]
and I invest in Solana.
[911]
My investment goal is to own 1 bitcoin,
[915]
10 Ethereum and 100 Solana.
[918]
That is what I am going towards.
[919]
In today’s date, it must be
[921]
an investment of around ₹1.5 crores.
[923]
That is what I am moving towards,
[924]
so, the whole month,
[926]
whatever my investment is,
[928]
I slowly buy Bitcoin, Ethereum,
[930]
and Solana in this ratio.
[933]
And that is something
[934]
that I would recommend to you as well,
[935]
if crypto is something
[937]
that you believe in.
[939]
One thing I forgot,
[940]
which is very important.
[941]
A lot of people say that let’s invest
[943]
in fixed deposit as it’s stable.
[945]
And I would like to share
[946]
an alternative to fixed deposit with you.
[948]
Fixed deposits may not be
[950]
the best for you,
[952]
because on fixed deposits, number one,
[954]
tax is applicable.
[955]
And if you are in the highest tax bracket,
[957]
which is 30%, so whatever rate of return
[960]
you are earning,
[961]
which is around 5%,
[962]
remove 30% of it.
[964]
So, you are left with 3.5% only.
[966]
At today’s date, inflation is 6-7%
[968]
Which means every year,
[970]
you are losing your money by 3.5%.
[974]
That is the loss in value of your money
[977]
every single year,
[978]
if you put it in fixed deposits.
[980]
Which is why I would recommend,
[982]
instead of fixed deposits
[983]
you can choose from two options.
[985]
Number 1, debt mutual funds.
[987]
These are the mutual funds
[988]
that invest in the debt of companies.
[991]
And because these are mutual funds
[992]
run by large organizations,
[994]
backed by very experienced managers,
[997]
so your risk is significantly less.
[1000]
Of course, it is not zero.
[1002]
In fixed deposits, risks are almost zero.
[1004]
Here, there is a level of risk,
[1007]
but because of the risk,
[1008]
you also get a better
[1009]
return than fixed deposits.
[1011]
The second option is corporate bonds.
[1013]
Corporate bonds are issued
[1015]
directly by the company.
[1016]
Just like fixed deposits,
[1018]
but imagine not a bank
[1019]
but a company giving it.
[1021]
So, the company gives
[1022]
a stable fixed return.
[1023]
And it, typically, is a
[1024]
one to three year horizon,
[1026]
on which you get a return.
[1028]
Wint Wealth is a great option
[1030]
to evaluate and explore corporate bonds.
[1032]
Again, it’s risky, in the sense,
[1035]
that it’s given by a company
[1036]
and not by a bank,
[1037]
it’s not a government bank.
[1038]
But the good thing about, say,
[1040]
something like a Wint Wealth
[1041]
which is the platform,
[1042]
that all these are secured bonds,
[1044]
meaning thay are backed by company assets.
[1047]
And there is a very tedious
[1050]
and an in-depth evaluation of these bonds
[1054]
that is done at the level of the platform
[1056]
before it goes out to the general public.
[1058]
So, these are good alternatives
[1061]
to fixed deposits, according to me,
[1063]
if you want to consider a stable income.
[1066]
The same thing is around gold.
[1067]
A lot of people say gold
[1069]
may not be really good,
[1071]
because lately,
[1071]
the price of gold is almost flat.
[1073]
So, what to do, what not to do?
[1074]
For that, for example, great solution is
[1076]
All-Weather Investing smallcase.
[1078]
All-Weather Investing smallcase
[1079]
invests in debt, gold, and equity.
[1083]
So, you are balanced in that sense.
[1085]
Because of that,
[1086]
the return is not very high.
[1088]
But the stability is awesome.
[1090]
And if you are looking for that stability,
[1092]
and don’t want to invest only in gold,
[1094]
then something like
[1095]
an All-Weather Investing
[1096]
is a great start for you
[1097]
from a smallcase perspective.
[1099]
This is how you should
[1101]
think about your portfolio.
[1103]
In summary, X which is your age,
[1105]
is the most important determinant.
[1107]
The 50:30:20 rule,
[1109]
determines whats the investment amount
[1111]
which should be at least 20%
[1112]
of your monthly income.
[1114]
And that 20% will be split into
[1116]
stable and high-return assets.
[1119]
The mix will be determined by your age.
[1122]
Hundred minus X goes into a high return.
[1124]
X goes into the stable return.
[1127]
A stable return is your
[1128]
tax-saving instruments,
[1130]
gold, fixed income instruments.
[1132]
And your high-return instruments are
[1134]
equity, which may be direct stocks,
[1137]
if you can research,
[1138]
maybe mutual funds
[1139]
or smallcase plus crypto.
[1142]
Real estate, a lot later on,
[1144]
and only in the stable category.
[1147]
Not in the high-return category,
[1148]
because my experience is
[1149]
that they give a more stable return
[1151]
and not high return.
[1153]
When you have all of this in your hand,
[1156]
you understand that whatever your age is,
[1159]
how to start your investing journey.
[1162]
The worst thing that you can do
[1163]
is to say, that I am already late.
[1165]
You are not late.
[1167]
But every single day
[1169]
that you do not invest,
[1170]
is a day that you are not letting
[1173]
compounding take over your investments.
[1176]
I hope this was useful.
[1177]
Ankur Warikoo, signing off!
Most Recent Videos:
You can go back to the homepage right here: Homepage