First Job Personal Financial Investments and Planning Basics

First Job!!! Each of us has some very special bond and memories towards the first job. From the time you give that interview with butterflies in your stomach, confidently answering the question when you are bundle of nerves inside, giving your wardrobe a overhaul, having your name and salary typed on an offer letter and that very First PayCheck that has your name printed in the capital letters sums up all the excitement of your First Job. I experienced all of this and more about have a decade back and that is when learned all about making smart investment from the very first job itself. Here is how to make the right investment from the very first job.

If you have some financial short and long term goals then great. If not may you can set goals like when do you want buy your laptops, black berry, vehicles, home, an international tour, etc to begin with.

Fixed Deposit:

It is one of the safest mode of investment. Typically the interest rates range between 5% to 7%. But with economy recovering post the 2009 financial debacle, banks are now offering as much as 9.50 %. When you are in your first job and you are bank is offering FD rates of over 8.50 % at any point in time invest at 10 % of your salary in it for the period of 3 to 5 years and keep making such investments as and when you have opportunity in terms of better Fixed Deposit Rates.

LIC (Life Insurance Corporation of India):

Safest long term option which also serves as one of the most effective tax saving tools. Usually, each family has their own LIC agent, if you don't then pick the one who has been in the industry for at least a decade and knows his ways around the government offices and understands your needs correctly to guide you to pick the right scheme.

Today there are numerous LIC policies being made available for you providing numerous facilities-medical expenses, accidental expenses, etc which one can claim after certain period of time, you can also withdraw certain percentage of amount after initial few years. Regular investment in LIC makes a positive impression when you are applying for loans.

You can always being with a smaller policies and draw bigger ones as you grow professionally, but ensure that you have you very first LIC policy draw within first 6 months of your job, the quicker your are used to save money for investments the better.

PPF (Public Provident Fund):

Another sure shot and safest personal investment option for your first job. You could begin with at least a Rs 1000 a year and increasing the amount and number of such accounts and and when you grow financially. Current rate of interest on PPF is 8%. You get the returns at the end of 15 years so earlier you start the better. Being a Government's investment option, it too helps a person in getting loans and improves your credibility. Most Indian parents in middle class families have made money from this arrangement when the rate of interests were 14 % and above.

Equity:

Equity market is not a cup of tea for everyone. But sign up with some good broking firm, especially if your family already has one nothing like it or else simply pick one the bests like Sharekhan, Karvy, Motiwala, etc and if you do not understand market study it closely and invest only 5 % of your total income here and be totally ready to bare loses. Never invest too much money here or keep it on top most priority list. Simplest ways for newbies are:-

• Buy IPO (Initial Public Offering) and sell them at little higher price, DO NOT get GREEDY.
• Invest in shares which give dividends and hold on to them for good amount of time.
• Purchase shares that fetch you yearly discount coupons. Even a single share could get your at lest 6 discount coupons up to 20% on your favourite brands. (All the financial experts out there would probably laugh at this one, but when you are in your first job any discount with just one time investment is a welcome ;-)
• Invest in shares which have a history of giving away bonus shares.

Make these investments slowly and steadily, talk to your colleagues, friends and relatives who are already investing and make smart choices.

Invest in Gold or Silver:

In India, the yellow metal has been always looked upon as something auspicious and safe investment which can come handy in the rainy days (many good old Bollywood movies have done their bit to condition it in our system). Had I written this hub a bout a year and a half ago I would have advised you to go all out to buy gold, but right now, in India, the gold rates have touched and cross the roof with Rs20k per 10 gm. Due to this, each one is now turning to Silver which to has risen from Rs20k (in 2008) to Rs45k (now) per kg.

Of course you are not getting married and because you are just out of college most of you still like your funk accessories and also, may be your salary doesn't permit you to buy any of this any time soon. When you are going to get married, you would realise the rates of gold or silver have skyrocketed beyond your reach. Buying metal doesn't necessarily mean ornaments- buy brick or coin which begin from as less as 1mg. Agreed, with all the expenses, investments, you probably wouldn't have enough money to purchase gold or silver, but if you plan well you can very well do it. Keep a target of a festival close to your heart (Diwali, Christmas,Ganpanti, Holi, etc) or your birthday, to buy at least 100-500mg of a silver brick or coins in the first year of your professional life and with little advise from your mother you would always smartly invest in yellow and white metal.

Trust me when its about precious metal, no one can beat or out do your mother's years of experience. Period.

File Your Returns Each Year

Find a good CZ (Chartered Accountant) wo knows his way around government's financial regulation and offices (you know what I mean). Always File your returns on time each year, even if you do not fall under tax paying bracket. File zero returns if that is the case, but never miss. It would always make getting your loans sanction easier and also improves your financial reputation on papers.

So go out their make your money and invest smartly.