10 Learning’s from Senior Citizens on investments!

”Money Making Hacks by Jasmeet S Anand Vol 3“

Senior Citizens are highest level of investors, There are novice investors and then Young investors, then experienced investors and then comes the category of Senior Citizen investors. They have seen all seasons and then they come to conclusion on their investments. All their life they have lived for others, to make two ends meet for the family and here is the residual amount which they have saved for their old age. Am sure, they would want to take lesser risk with the money and their decisions would be based their experience of all weathers.

Here are some learnings from Senior Citizens on Investing:

1. Fixed return investment

Senior Citizens always prefer to invest in fixed return instruments over uncertainties. The later year of ones life should have certainty as far as money is concerned. This takes care of the monthly bills such as rent, doctors fee, electricity etc. Also, this gives them confidence for following month’s expenses being taken care of. Instruments like FD, Bonds etc. 2. Govt schemes with Tax benefits

All Governments have tax friendly schemes for senior citizens to invest in their hard earned money. This not only gives higher return, but, also security as the same is backed by the central government These schemes generally give 1 to 2 % higher returns and at times tax benefits too. This includes post office and SCSS (Senior citizen savings scheme) 3. Stay away from Risky high return schemes

Senior Citizens prefer staying away from investments offering high return as the same are equally risky. They may pay high return for few months but the capital is at risk. Where as a young investor may take a risk of capital for higher return, Senior Citizen would not mind getting a little lesser return but with surety. 4. Create Monthly Inflow

The idea behind investing by Senior Citizen is creating a regular flow for self use. The fresh investments are in instruments which can give continuous returns over years. This is basically substitute to the salary or regular income which in some cases stops after certain age.

Also, where the Senior Citizen is not getting pension and has to live on their savings, Regular income becomes more relevant. 5. REIT/INVIT instead of Real Estate

Senior Citizens interested in investing real estate for capital gain and regular rental income also have option of investing in R.E.I.T ( Real Estate Investment Trust) or INVIT (Infrastructure Investment Trust) These instruments are as good as real estate investments with lesser hassles of registration of properties etc and rent collection.

Embassy & Mindspace are two prevalent REITs available today in India. The same is transferrable to legal heir without any hassle. 6. Less complicated Assets

Senior Citizens prefer to invest in less complicated asset, Assets which can be easily transferred to the heir and have less complications afterwards. Like, investing in joint name with too many people makes the investment complicated. Investing in structured products with dependancy on various factors is complicated asset. 7. Registered Will / Nominations

Senior Citizens always ensure that they have a very clear Registered will. Now a days a lot of compilation of transferring properties and assets can be avoided if one has a registered will. There are companies which help you in creating registered will as per your Requirement.

one should not transfer all his assets to heir during lifetime. Nominate them ! All bank accounts are being nominated in favour of the legal heirs. There is provision of nominating more than one person with clear % share to be given to each nominee. 8. Adequate health cover or exigency fund

Senior Citizens do not leave any emergent situation to fate, They always provide for adequate health or Mediclaim and in case where the same is not possible, They always have a exigency fund which can be used in situation. 9. Invest in Equity too

A simple rule which many senior citizen apply is 100 - age = Equity allocation. If some one is 60, then 100-60 = 40 % of the wealth is invested in equity portfolio. Why a senior citizen ignore the fastest growing asset class? But, the equity investment is part of the portfolio not complete portfolio as there is a risk of short term down fall in equity portfolio always. 10. No Long term commitment

Senior Citizens should ideally not get into any long term commitment asset. Such as construction linked payment plan for under construction property. The same can get delayed and money can get stuck for long. The aim is to enjoy the money you have earned and live peacefully. Money matters can really be very taxing at that age. No one would like to see their hard earned money going down the drain in the end. Better idea is that senior citizens should not get in long term commitment with money and should keep it simple. Trust, there is a lot of learning from our Senior Citizens way of investing. The life long journey which they have seen with money is worth emulating. Senior Citizen today was once a 20 year old with dreams, a 30 year old with family, 40 year old with responsibility, a 50 year old getting his kids sent to college and getting them married off, a 60 year old when the earning were to drop but uncertainty of living too long or living too short was still there.

jsanand75@yahoo.com