Friday, 14 October 2016

4 Things You Should Do With Your Diwali Bonus

Posted by RaviKumar Nama
Diwali is a big festival to celebrate great time with all your family members and children. Diwali is a festival of lights which intertwined with wealth and prosperity. For many investors, Diwali is a new beginning year of reshuffling their portfolios and start with new investment portfolio. Diwali could be a suitable time to make a wonderful portfolio with proper diversification. This is the right time to review your existing portfolio and to exit out of any bad investments by replacing with new investments. For many companies, it is common practice to announce bonuses to their employees on this Diwali. Usually many of us may not be prepared to utilize this one-time-bonus in a proper way and end up with bad assets on their hands. What are the things we should do with the bonus amount?



4 Things You Should Do With Your Diwali Bonus:

Diwali is the auspicious time for many companies to announce the bonus to their employees. This bonus would be range from thousands to lakhs and is definitely a huge amount that should be planned wisely. Instead of expending on luxury or non-essential things, it is always suggested to plan some investments or paying off expensive debts with this extra bonus. Considering the following 4 things before preparing your investment plan with the bonus amount is highly suggestible.

1. Maintaining Emergency Fund:

Now-a-days uncertainty is the most certainty thing in all aspects of life. Be it a job loss or medical emergency or your kid's educational requirements, some times you should be well prepared with sufficient amount in your hands. So, it is better to park some portion of your bonus amount into a Bank FD or Liquid Mutual fund or in any Debt Mutual fund. I strongly recommend to park your money in a good Liquid fund instead of Bank FD. High liquidity and higher yieldings are possible only with Liquid Mutual fund when compared to traditional Bank FDs / RDs. Also, Bank interest rates are slowly decreasing and when you consider the inflation rates, the net yieldings from a Bank FD is almost negligible.

2. Insurance Requirements:

If you have dependents and you don't have any Term policy and Health Insurance policy, then it is the right time to consider these 2 policies. Many of us consider Life insurance policies for investment purpose. This is the biggest investment mistake and you need to pay huge cost at the end. Do not take any Money-back policies or Endowment policies. Consider Term policies which provide insurance at cheaper prices. Apart from the term policy, also consider a
Family floater health policy to protect your family. Though your company providing Group Health insurance policy, it is suggested to consider a back-up health insurance plan for your family. Park some bonus amount towards your insurance requirements and maintain every year.

3. Reshuffle Your Portfolio:

Reshuffling or reviewing of your portfolio at a specified intervals are very much required. This Diwali can be an auspicious time-frame to revisit your portfolio and invest your bonus into a good assets. You show an exit door to bad performing assets and re-fill this with new good performing assets. Markets are reaching at peak levels and this is the time to sell-off your bad equity assets and invest into debt assets. Many experts predicting a Market crash in the coming days as the correction is required when Markets at peak levels. Try to include Debt assets like Gold ETFs or Debt Mutual funds.


4. Pay off Your Expensive Debts:

Last but not least that try to decrease expensive debts like Credit card loans, Vehicle loans, Personal loans etc with the bonus you have received. Paying off your home loan is not suggestible as the Home loans are at cheaper interest rates and moreover you have been receiving tax benefits from your EMI components. Instead of spending recklessly on consumer items, one can also use Diwali as an opportunity to plan his future investments, including those which help get tax benefits. Moreover, a disciplined spending habit and doing away with impulsive buying will help one escape the aftershock of a hefty credit card bill.

Conclusion:

I am wishing you all readers a very happy and colorful Diwali. Control your emotions and invest in a right mix of quality assets and reach all your financial goals. 

2 comments:

  1. Diwali Bonus is really effective for the investment, This is the right time to invest..!!

    ReplyDelete