In the present scenario, most Indian families have turned dual-income families, where the husband and spouse are putting in the hard yards to carve a bright future for their family! The rising costs of living are the leading contributors to this trend. But then there are many scenarios where such an ideal arrangement does not quite work out. The birth of a child is one such instance, where the spouse goes in for a long professional break and might never kick-start her career again. Then there are other unfortunate instances, where the illness or lay-off of your spouse puts the entire burden of family income upon the shoulders of a single person. It is no wonder then that the investment needs of the single income families are drastically different from the ones that have at least a couple of earners.
If you have been thrust into the role of the primary breadwinner for the family, then there is no need to panic. Yes, your savings might take longer to show progress. You might have to go in for longer loan repayment terms, but you can still carve a bright future for your family. Here are some simple tips that would aid you to make good investment choices!
#Tip 1: Pay Long Term but Earn Quick
This should be the mantra for all your investment decisions. While you might not have the savings to shell out huge fortunes from the pockets, you can always avail the long-term re-payment schemes in terms of bank loans. And through your investment, you want to get returns as quickly as possible. The perfect investment for single income families in this respect is to purchase a rental property. The highlights of a rental property are many. You can get great home loan offers (even when you are in search for a longer repayment period). The government also allows significant tax savings against such property purchases. And once you have acquired the property, given India’s rental property market condition, you can quickly generate month-by-month earnings through it. So, such an investment option ticks on all the right boxes.
NOTE: Apart from investment in rental properties, most of the other quick income generation scopes (in terms of investment) come with high dangers. Beware of them!
#Tip 2: Plan better for your retirement
The onus is on you, it is your responsibility to invest in the right retirement plans that keep you covered once your days of hard work are done and dusted with. Unlike dual-income families, in this scenario, you have to care for the wellbeing of not only yourself but your spouse as well. Suppose you are investing Rs. 20,000 (PA) in some investment scheme, then you might want to invest the same amount for your spouse as well. This will cover both of your expenses in those leisurely retirement years. This is easier said than done, but with some cost savings, you can easily arrange for this.
#Tip 3: Invest in Life Insurance with Long Term Disability Clause
Life insurance policies are really beneficial savings for the single income families. You can get great paybacks once the term of the insurance is completed. But all the while you and your spouse are completely insured from an uncertain future. You never know when life might take an ugly twist, and it is in these testing times the life insurance policies really help out. Some of the insurance policies come with disability cover; such policies should be your choice. If your spouse is seriously ill and cannot care for your children, then you might have to employ extra hands to get the work done. The long-term disability cover would cover a major part of such expenses.
#Tip 4: Arrange for Room Sharing
This is again aligned in some way with real estate investment (albeit with a difference)! If you want to boost your income then this is a good idea. Suppose you own a 3 BHK property, and there is a room that always stays vacant. Why don’t you try making some money with this room? If you own a property near a reputed higher education center or in near vicinity of an IT corridor then you might find plenty of youngsters willing to share the space. Paying guest rentals are a great way to boost your income with a minimal upfront investment. Depending on the size of your room and its dimensions, you may have more than one paying guest. And that gives you good money earning opportunities.
#Tip 5: Invest in the Long Term rather than Short Term
There is always a lure to earn quick money. But, quick money earning schemes come with their hassles. It is a win-it-all or lose-it-all type of a scenario. And such a risk is not ideal for your condition. You should always opt for long-term profits, where the money grows at a steady pace. Do not risk everything by opting for a quick money generation scope. Always use the government or reputed investment schemes, and you will find most of them providing long-term gains.
Plan for the Transition
Having said all this, you are still wondering: how to arrange money for such essential investments? So, here are a few suggestions. You need to first of all trim down your monthly budget significantly. Right from saying a complete no to family dinners at those lavish restaurants, to trimming down the things you could do without in the monthly groceries and settling for an overall low cost of living.
Hope our ideas would help you plan a good investment keeping both your present and future secured!