What's the best way to invest your salary?
A chat with our co-founder Harish Reddy!
Tell me honestly, what’s the first thing you do when you receive your salary?
For most of us, post expenses, it’s buying something that’s been on our wishlist.
Of course, it’s not easy to change this behavior, that new pair of headphones is attractive, and you must try the vitamin C serum your friends are raving about…
Well, think of us at Stable Money, as the friends whom you can discuss your investments with!
Today, you’re going to be chatting with our co-founder Harish Reddy on how to turn your salary into long-term wealth.
What’s the amount I should ideally invest every month?
Well, the general rule of thumb is to invest 15-20% of your income. Your salary deserves to be treated like your best friend with importance and care.
The classic 50/30/20 budgeting strategy states that your after-tax income should be divided into three categories: needs, wants, and savings.
50% of your income should go towards needs such as rent, food, and utility bills.
30% can go towards wants such as shopping, dining out, etc.
Finally, 20% of your income should go to savings such as investments in Equities, Fixed-Income instruments, and Gold.
What’s an ideal risk-return ratio to maintain for any portfolio?
The risk-return ratio depends on the phase of life you’re in.
If you’re in the mid-20s to early 30s, you can afford to take big bets — An ideal portfolio here would be 30% in Fixed Income (FDs, Debt Mutual Funds, Bonds), 10% in Gold, and 60% in Equities (Stocks, Mutual Funds).
If you’re in your mid-30s to early 50s, you want to plan for your family and their combined expenses as well — An ideal portfolio here would be 40% in Fixed Income (FDs, Debt Mutual Funds, Bonds), 10% in Gold, and 50% in Equities (Stocks, Mutual Funds).
If you’re in your early 50s to late 60s, you want to plan for retirement and a no-income period — An ideal portfolio here would be 70% in Fixed Income (FDs, Debt Mutual Funds, bonds), 10% in Gold, and 20% in Equities (Stocks, Mutual Funds).
There’s been an influx of FD bookings in the last two quarters, what explains this positive trend?
The secret to investing is not chasing returns, but staying invested to reap the benefits of compounding.
We’re seeing a spectacular moment in time wherein FD rates are as high as 8.50%. With quarterly compounding, you get an assured 8.77% annual return.
Any retail investor understands that an 8.77% annual return at minimal risk is basically a no-brainer.
FDs are like the big-ticket movie stars of your portfolio — offering big and predictable returns.
How are we introducing FDs to newer generations like you?
Historically, FDs have been India’s go-to asset class. Now, as newer generations decide where to invest, it’s important for FD investing to adapt to them.
Thus, we’re bringing FDs to new investors in the language they understand. It’s a fully online booking process with a transparent and delightful UI/UX.
Booking an FD is as easy as making a UPI payment or ordering food from Swiggy.
“The proper financial mindset is to be scared enough to save for the short run and brave enough to invest for the long run.” — Morgan Housel
How should I think about investing in FDs vs. P2P lending options?
It’s our job to provide retail consumers with the best possible offerings. So far, small finance banks have not been easily accessible to the masses. The fact of the matter is that they offer excellent interest rates, they’re RBI-insured up to 5 lakhs, and they’re low risk.
Always remember that good investors focus more on elevating their habits rather than changing their human behavior!
P.S. If you’ve booked an FD with us already, it would mean the world to us if you left a rating on the App Store or Play Store.
Best,
Team Stable Money
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