FuzzySushi

Savings rate and investment allocation rate

Hi folks,

We, as a family of two, roughly save 50-60% of our salaries every month. Amongst the savings, 95% goes to equity mutual funds (index). We don’t have any other hard asset and stay on rent in a tier 1 Indian city hardly without any EMI and planning to expand the family soon.

I was wondering,

how are we doing in terms of personal finance, and,
what are the typical savings rate and equity (or other asset) investment allocation rate for others?

6mo ago

2.4Kviews

Find out if you are being paid fairly.Download Grapevine

FloatingMuffin

Google6mo

You might have to diversify your investment portfolio with some small percentage in safer investments like FDs.

If you haven't already, create an emergency fund that's worth 6 -12 months of expenses and keep that in your savings account. How much is your TC and networth?

JumpyPretzel

Stealth6mo

Why to keep 6-12 months worth of money in Saving Bank account!! One should put in FD, multiple small ones, which can be broken if needed.

JumpyPretzel

Stealth6mo

Why are you able to save only 50-60%? I am assuming both persons work, if even then you are able to save only 50-60%, then it looks a bit less.

You haven’t told whether you have pre-existing FD/Cash or not. If no cash/fd, put 1 yr worth of expenses in FD.
Also, keep saving 20% towards lumpsum expenses like travelling etc. Post that you can save the rest in equity. Everything in equity is too risky.

FuzzySushi

Morgan Stanley6mo

Thanks for the advice!

Yeah, I agree the savings rate is a bit less. Both of us are early stage of our careers, between 1-3 YoE. And then we live in the most expensive city in India.