9 Point Investment Plan

Investment Plan

Personal Finance is Personal, we get it. But, there should be a simple guide which can help us review our finances time to time, it should be simple enough so that anyone can understand it easily and at the same time it should be customizable enough to cater all situations of any group of ages.

I was trying to find something simple and customizable, and which fits in one page so that it can be posted on my personal desk for easy quick reference. I looked at many articles and books but I found something good enough at a place where it was expected least. I found a piece written by Scott Adam (Creator of Dilbert Cartoon) on 9 point Investment Plan. I did not expect a cartoonist to have such a detailed understanding of Investment Plan. It is simple enough to read and understand, and easy to execute. But his version is filled with cryptic alien product for non-USA people so I decided to create one for the Indian context.

Below is my 9 Point Investment Plan on similar lines to that of Scott. At some point in time, when I get personal space to stick a paper in my room, I will put below 9 Point Investment Plan on a desk along with checkboxes to check and mark them complete when I am through with them, and revisit them every year on the first weekend of April month.

Here is my 9 Point Investment Plan.

  1. Write a will.
  2. Pay off credit card(s) and loan(s).
  3. Get Life Insurance, if you have a family to support. And buy a Individual Health Insurance.
  4. Fund your EPF (Employee Provident Fund), which is an Occupational Retirement Plan.
  5. Fund your PPF, ELSS, NPS and other Section 80C products, which are Individual Retirement Plan. Avoid Investment-cum-Insurance plans.
  6. Buy a house, if you want to live in a house and you can afford it.
  7. Put six months worth of expenses, as a emergency fund, in a Bank Account (as FD) or Liquid Fund.
  8. Take whatever money is left over and invest 70% in the equity fund and 30% in debt fund OR a Balanced Fund which gives me near enough proportion.
  9. If any of this confuses you, or you have something special going on then hire a fee-based advisor, not a distributor who charges direct/indirect a percentage of your portfolio.

Let’s start new Financial Year with above 9 Point Investment Plan. Review your Financial Life using above 9 Point Investment Plan, and let me know how it helped (either via Comment or email). Put it at a continent place and use it every time you review your financial life.

Happy New Year.

Image Credit: Quantum Books

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Also published on Medium.