BE RICH and SAVE in times of COVID-19
Disclaimer – Read only if you have a steady stream of income (for ex; salary, rentals, interest, dividends etc) and you are in the age of 24-50. So if you are from a simple middle class, family person who enjoys on weekends, goes to movies, dines out and goes on vacation, then read on…
We suddenly have more money to spend but cannot go out. Time to RETHINK and save. A typical saving made by a family of 4 (parents and 2 kids)
|Nature of spend||Approx spend per month (INR)*|
|Going to movies (tickets, fizzy drinks and popcorn)||1500|
|Eating out/ Ordering Pizza ( twice a month)||3500|
|Visit to mall (shopping, playzone, eating) / online shopping||5000|
|Parlour / Salon/ Spa Visits||5000|
|Monthly gym fees, dance class, kids class etc||5000|
|Commuting to and from office (petrol, cab, bus, metro pass)||5000|
|Clubbing/ Entertaining guests (entry ticket, drinks food)||5000|
|Summer Vacation with family||50,000|
Now double or triple it for the period the lockdown was imposed. Mind you above does not include salary of your domestic helpers, utilities, school fees, medications etc… which are essential. Illustrated above are those expenses without which we survived and can help us be wealthier in times to come.
Ok so we figured the savings, now what should we do. Well the cardinal rule of savings is “ START EARLY”. In times to come, once situation normalizes maybe you want to still avoid spending on things “NON-essential” and save on following:
· Invest in Gold ETF – Gold was just about forty thousand at the beginning of the year. 5 months in the year and its already fifty thousand. 25% return of investment in 5 months. Much better than stocks with minimized risk.
· Indexed linked mutual funds – Already the stock market has become a roller coaster ride. It goes down and then bounces back. It would be great opportunity to invest in Indexed related SIPs.
· Debt reduction – Pay-off those home loans, car loans, other personal loans which are on high interest.
· Insurances – Imagine you got CORONA and are severly ill. All savings gone, a higher amount of insurance would have been better. Buy that higher health and term life insurance you always wanted to buy!!
· PPF and Sukanya Samridhi – Few exempt exempt exempt (EEE) schemes left by the government. Time to invest for your kids in such schemes.
· Start Learning Investment in Stock Markets – The best thing is government has classified stock markets operation in essential services. so people who have need can liquidate securities and those who have excess can take opportunity to invest. Investment without research is risking money. Start reading research report of companies and learn.
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The above does not mean you shouldn’t enjoy life to the fullest. FUN is playing on ZOOM calls with friends and families. Playing UNO and LUDO with kids. Helping wife with the chores. One less trip to mall, one dress less bought from the FAB online sales, may help us to save more and live a “AATMANIRBHAR” retired life.
PS – These are strictly the views of the writer.