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Investment Tips For Dual-Income Couples With Two Kids

Adhil Shetty
Investment For Dual-Income Couples

Parents across the world wish best for their child. They start planning for their child's future as soon as they're born. However, the prospect of raising children is fraught with financial challenges – be it single income or dual income. In this article, we would be talking about parents who have dual income and have two kids to tend to. The advantage of ‘dual’ income is easily counterbalanced by the expenses that raising kids entail. Building a corpus for children has become a necessity with the inflationary trend in school fees. Let us take a look at five investment tips for couples who belong in the 'dual income, two kids' category. Start investing early: The golden rule here would be to start planning and investing early. You should calculate approximately how much amount you would need for both your children, and plan accordingly. This planning should entail early investments that give handsome returns. Financial investment is like planting a sapling. The earlier you plant, the sooner you get to see the tree/fruit. It is therefore advisable to start investing as early as possible while there is substantial disposable income. For a couple, this would mean, sharing financial liabilities like rent, cars, other expenses and keeping aside enough for investing in profitable avenues. Also, an early start ensures greater accumulation of wealth at the time of retirement and a larger corpus of funds to cater to your kids’ periodic needs. Portfolio diversification: At some point of time in their investing career, high income earning couples should look to build an investment portfolio. Your investment portfolio should consist of a platter of stocks and bonds, and not just investment of a single kind alone. This is where the services of a financial planner or adviser come handy. Your financial planner can help you build a portfolio which is customised to your needs. He/she will work out a judicious mix of long-term and short-term investments, along with the scope for ready funds when the need arises. For example, you can discuss with your financial planner the funds needed when your child wants to go for higher studies which are getting costlier with every passing year. Your planner can help you pick and choose from a variety of investment options like Stocks, Shares, Debentures, Mutual Funds, ETF’s, Govt. Securities and Bonds, Debt funds, CDs, FDs, Insurance, etc. Real estate: Real estate is one lucrative avenue to invest with the least risk. Increasing population pressure keeps land prices north consistently. There will always be more and more people who need to be accommodated on the limited supply of land. Result – land will always remain a precious commodity. There may be added expenses in terms of property tax, holding tax, etc. too, but you also get to earn neat regular incomes from rent. In a nutshell, real estate is a good long-term investment that may start giving returns immediately. Think retirement: The dual-income families with two kids have to tread a cautious path in terms of investment. They cannot afford to be overtly aggressive in their approach and choose high risk-high return avenues only. Things can go wrong very easily. One needs to make sure that a part of their disposable income gets invested in retirement plans like National Pension Scheme (NPS) or any other such schemes which propose to provide a regular stream of income post retirement. Investment discipline: Last, and certainly not the least, one is advised to strictly adhere to an investment discipline. Make your own rules, if you must, but never cross the line. Do not invest from the part of income that is meant for food, rent or mortgage. Ideally, one should set aside a fixed amount every month for investment and never touch other resources, come what may. Investment is like a habit, and like most habits, there is a danger of addiction. Be disciplined in your approach. Neither be too aggressive nor be too subdued in investing. Also, make a habit of tracking your investments – it is always a comfortable feeling to be in the know of how your assets are growing and how your stocks are performing. (The writer is CEO, BankBazaar.com)

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