Build your portfolio - Plan the investments 2

Step two in planning your investments is minding your on-going monthly savings and aligning it to your portfolio. First write down all your monthly expenses. For example jot it down something like this

Petrol	1,000
Maid	1,000
Tel	500
Electricity	500
Grocery	2,000
Miscellaneous	2,000
Lunch	2,000
EMI	15,000
Shopping	5,000
Total expenses	29,000

Now map this with your income from all sources (self, spouse, rentals, investment income, etc) and see the balance you generate at the end of this. This will give you an amount you save every month. With that try and map it again to the kind of investments you will do on a monthly basis.

Think of the following options
1. Recurring deposits for a year (at the end you can transfer them to a FD)
2. SIP (Systematic investment plan) into a mutual fund
3. A gold scheme of say 3000 rupees. This will give you sizeable chunk at the end of the year to buy some gold jewelry
4. Stock picking. Think of some good stocks you want to keep investing into (more when we talk stock markets)
5. Of course assume you will have sufficient cash in hand based on step 1.

All this will then automatically start aligning to your risk profile. This will also help you reduce waste in terms of spends that are ad-hoc. This may sound a simple step but doing this is very critical. Also monitoring this every month will give keep you on top of your finances.

Now look at both step 1 and 2 and map it to your short and long term goals. You will see that you are now making it happen or at least in the direction to do the same. Remember, managing your money is as important as taking care of your health and more important than watching IPL matches!

I am attaching a template (in the next post) that I usually use for planning. Hope you find it useful. Happy investing. Subsequent posts I will talk about stock markets!