Choose the right way of saving to buy a house according to your age

House planning

50 lakhs in 15 years even by saving small from the age of 25 can help you easily manage money and buy your dream home.

Buying a house is for everyone. The age to see this dream is not too small or big. All that is needed is the right planning regarding savings. Depending on the age at which you plan to buy a house and the budget you plan to buy, the method of investment for savings should also be chosen accordingly.

In terms of economic self-reliance, a normal adult stands on his own feet at the age of about 25. If you want to buy a house in future, you can save for it from this age.

Ways to invest in equity

The first option is to invest directly in the stock market. Another option is to invest in mutual funds. Mutual funds are a better option for those who do not have much knowledge about the stock market.

What is equity?

Suppose Shubham has invested his money in a company. In return, Shubham gets shares of that company. Meaning now Shubham also has a stake in the company. This share is called equity. Risk should also be kept in mind while investing in equity.

This is how you can plan your savings for your home.

If your age is 25 to 30 then you can take a big risk

Investing in equity is the best option at this stage. The reason is greater ability to take risks and freedom from all family and social responsibilities. The thumb rule of investing in equity is to subtract your age from your savings. Invest whatever is left in equity. If you are investing at the age of 25 years, then after subtracting 25 from the total savings, the remaining 75 can be invested in equity.

For example... someone starts investing in equity mutual funds at the age of 25 with a SIP of Rs 10,000 every month. At the age of 40, he will have a corpus of more than Rs 50 lakh (deposited amount Rs 18 lakh, return Rs 32 lakh), if he gets even a minimum rate of return of 12 per cent. There is at least this much scope for equity in the long term. The same thing applies to people of all ages. According to need, this time can be 10 years or more. There is a possibility of getting at least 10 to 15% return in this.

If age is 30 to 35 then focus on fixed return options

In saving money to buy a house after the age of 35 years, emphasis should be given to options giving fixed returns. At this age there are responsibilities of the family. This can include everything from children's education to their marriage. In such a situation, secure options should be chosen instead of risk. It has Fixed Deposit, PPF, Post Office Saving Scheme, Kisan Vikas Patra, National Saving Certificate Scheme. Fixed returns can also be earned by investing in short term options like post office fixed deposits and debt funds. 50 to 60% of the savings can be invested in equity.

For example... if a person invests Rs 10 thousand every month for 15 years in PPF with 7.1% fixed return, he will get a maturity amount of around Rs 32 lakh to Rs 55 thousand. Equity is subject to market risk. In such a situation, before investing in it with increasing age, one should consult and do research at one's own level.