You need to have adequate life insurance and health insurance cover to support your dependents in case of any crisis. If you have the burden of any loan, see to it that your insurance cover is adequate enough to finance the loan amount, otherwise the burden will be passed on to your dependents.
Ensure that you have at least 3-4 months' salary kept aside in your contingency fund. In these changing job market conditions, your expenses will keep coming in, even if you have lost your job. In such cases, your contingency fund can help you survive for a period of time.
Your financial goals:
Once you have checked with the above two options, the amount left in your hand is what you can invest. Invest more into equities for your long-term needs as it is greatly possible to be aggressive in such cases. Around 80 per cent allocation to equity schemes and the remaining 20 per cent in either or both debt and gold funds is what is advised to finance your long-term needs. For your short-term needs, mutual funds of short tenors can be adopted.
If you start to invest early, the probable chances of getting into a debt of a personal loan, credit cards etc. are reduced to nil, since you have finances to meet your requirements. Once you have structured your portfolio, the next thing is to review your asset classes and analyze their performances. If you think that the portfolio needs to be rebalanced, do so, only if there are drastic and long-lasting changes, which generally do not occur in most situations. But reviewing and rebalancing your portfolio once in a year is advisable.
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