Get Health Plan, Safety Fund Before Investing

Queries

Ria Shridhar, 22

What should my investing plan be with a potential global recession? My family disencourages investing in markets, but I wish to. Should I focus on building an emergency fund, or start investing early?

At 22, your biggest advantage is the ample time your money will get to compound effectively. First, build a basic safety net of at least three months’ essential expenses, and increase it to six months. Keep this emergency fund readily accessible, not in equity.

Next. start a small monthly systematic investment plan (SIP). Allocate a larger share of your monthly savings to the emergency fund and a smaller share to a diversified fund. Once your safety net is ready, increase your investment.

Avoid direct stocks, sectoral themes, and investing money you may need in the next five years. Your family may view markets with speculation due to risks involved. Rather than promising returns, show them you are investing gradually, with discipline, and for long-term goals. Recessions and geopolitical crises will occur, so your investment plans should continue through them. Also, ensure you have adequate health insurance.

Col Sanjeev Govila (retd), CFP, CEO, Hum Fauji Initiatives

Harshita Shukla, 24

I have been freelancing and earn around Rs 75,000 a month. My family suggests investing in gold. Given current gold prices, should I add gold to my portfolio? If so, how much should I allocate?

Gold can be part of your portfolio as it can provide diversification and protection in difficult periods.

Since your freelance income varies, your priority should be building an emergency fund. Also, set aside money for expected tax payments, if applicable, and ensure you have adequate health insurance. Until these basics are in place, don’t rush to buy gold because it is recommended.

Once you have this foundation, allocate around 5 per cent of your investment portfolio to gold. Over time, you may increase this to about 10 per cent, but there is little reason to go beyond that. Given gold’s sharp price movements in 2026, avoid making a large investments.

Instead, invest gradually over six to 12 months. For investment purposes, choose a regulated gold ETF or gold mutual fund over jewellery, as they offer liquidity, electronic ownership, and eliminate purity and storage concerns. Decide your allocation first, then invest. Gold is portfolio insurance, not its growth engine.

Col Sanjeev Govila (retd), CFP, CEO, Hum Fauji Initiatives

Ashish Nanda, 32

The outstanding amount on my home loan is around Rs 8 lakh, and I have enough savings to repay it all. Should I close the loan now or continue paying the EMIs? What is the process for foreclosing a home loan, and what are my formalities?

I assume you have sufficient funds for emergencies, ideally covering six months of expenses, and your near-term financial goals. In that case, foreclosing the loan can be a prudent decision.

If your loan is nearing completion, most of the interest would already have been paid, and the remaining EMIs are likely to consist largely of principal. Repaying the loan will eliminate future EMIs, and reduce your financial obligations.

To foreclose the loan, verify outstanding amount with your lender and make the payment. Once the loan is repaid, collect your original documents, a No Objection Certificate (NOC) or No-Dues Certificate (NDC), a loan closure certificate, and a letter confirming the release of the mortgage or charge on the property. Ensure any ECS/NACH mandates are cancelled. Finally, check if your credit report shows the loan as “Closed” and preserve all loan closure documents for future reference.

Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution.