Jai is still in the early days of his career. The extra income he will earn from his posting provides an opportunity to make some money. However, the primary consideration should be ensuring the flexibility to use properties He will build on the basis of his need. Objectives that drive their choice increase in value over time and liquidity To use the money when needed.
buying a house Delhi can be an attractive option for the potential appreciation in value. However, if Jay’s posting is extended, or if he chooses to work elsewhere, or if his performance results in more international postings, the investment in the home may be of little value to him. At a time when there is a need for flexibility in their career options, a home is an inflexible investment. Jay could have made a small investment in a house, with the clear intention of selling and releasing the money if necessary. He should avoid buying a dream home with his newfound wealth when it is unknown whether he will live in that house or not.
Buying gold would also be a limited option, as it can be an illiquid investment and may attract a high sentiment value. The option of asking your wife to sell you jewelery can be costly and difficult to make. Bank deposits are a safer option, but do not provide an increase in value. Jay may be better off choosing a mix of investments in proposed properties, having a small investment in a house he can be willing to sell when needed, proportion in jewelery to keep wife happy and some amount in bank deposits and mutual funds to ensure ready liquidity and high flexibility.
(Content on this page is courtesy of Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Aarti Bhargava and Labh Mehta.)