Noida-based couple krishna (42) and Neerja Pandey (40) were enjoying their evening tea on the balcony of their 2BHK apartment recently, when their conversation turned to how they could secure the financial future of their son Abhinav, who turned 15 recently. The couple wanted to build a corpus for their child, but with minimal disruption to their current lifestyle.
After the jolt of the Covid-19 pandemic, people are increasingly prioritising future planning, especially for their children. And like the Pandeys, many in their mid-40s are looking at legacy planning.
What is legacy planning? It is a financial strategy to create wealth for the next generation. Legacy planning is crucial as it ensures that a person's wealth and possessions are transferred to their next of kin or organisations they name in a will after their death. Traditionally, the focus has primarily been on investing in real estate. There are other options now, but more on that later.
According to experts, it is always advisable to start the planning early, as this will ensure that everything is in order when the time comes. “To create a legacy without taking unnecessary burden, it is always good to start as early as possible in your life on the plan,” says Anil Rego, Founder and Fund Manager at Right Horizons, a portfolio management services firm.
Starting early is good; however, selecting the right investment instrument for a duration of 20-25 years presents a significant challenge: whether one should invest in real estate and buy bonds (government securities) or choose contemporary investment options like mutual funds (MFs) and equities over fixed deposits (FDs), to grow wealth faster, ultimately allowing for a larger inheritance.
This story is from the October 27, 2024 edition of Business Today India.
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This story is from the October 27, 2024 edition of Business Today India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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