Money Moves for Millennials: How to secure your financial future today
In your 40’s, it’s a good idea to reanalyse your financial goals and focus on wealth-creation efforts.

To make your money work harder for you, begin with setting our financial goals. (Image: Freepik)
By Mayank Gupta
If you’ve just turned 40, you’re a millennial and a digital native. While the youth have the advantage of time, you have the benefit of greater knowledge and maturity to guide your financial decisions. You’ve already climbed a few rungs of the corporate ladder. Your financial commitments are higher too, with the responsibility of young kids or aging parents and with retirement looming over, it’s now the right time to build financial security for the long haul.
Hence in your 40’s, it’s a good idea to reanalyse your financial goals and focus on wealth-creation efforts.
Understand Your Risk Appetite
In the 30s, your responsibilities were lower, and you had more years of earning left. This means you could take on more risks. With increasing expenses in your 40s and fewer years to retirement, your risk appetite is lower which is coupled with medical expenses and other miscellaneous matters. Yet, you cannot take a conservative stance, as your investment returns need to beat inflation. Aim for your investment portfolio to generate 10% to 15% returns minimum to combat any emergency needs.
Assess Your Retirement Needs
To make your money work harder for you, begin with setting our financial goals. Almost 90% Indians in their 50s regret not starting earlier to save for retirement. When planning for your golden years, don’t forget to factor in waning health as you age, inflation, and some extra funds to fulfil your desires. The thumb rule is that your retirement corpus should be 30X your current expenses. Take long-term regulations and tax consequences into consideration, particularly if you are employed; consulting a financial counsellor may be helpful in this regard. Your investment portfolio can be rebalanced as needed and your risk tolerance assessed with the help of a financial advisor.
Diversify Your Investments
If your financial objectives include retirement, paying for your children’s school, and taking trips overseas, you should think about adding stocks to your portfolio. Keep minimum of 50% of your investments in stocks, and you should, because stocks can be one of the tools that will help you accomplish your goals in today’s marketplace given their worth and the rate of inflation. Being a liquid asset, stocks can come in handy during an emergency. You can choose a combination of growth, defensive and income stocks. Growth stocks tend to be more volatile and are a higher-risk-higher-reward option, while defensive ones remain stable even during market downturns and income stocks offer high dividend payments.
Mutual funds are a cost-effective way to diversify your investments. Choose the type of fund based on your financial goals, investment horizon and risk appetite. For instance, equity-linked saving schemes (ELSS) gave average returns of almost 18% from 2020 to 2023. The thumb rule to follow here is to avoid putting more than 10% of your net assets into risky investments. Mutual funds that invest in debt instruments or hybrid funds might be better if your risk appetite is low. They entail lower risk than stocks, while balancing stability and potential wealth-generation opportunities. Diversify your investment portfolio after checking the correlation between assets. For instance, stocks and gold have a strong negative correlation. When stocks decline, gold tends to rise. One can be mindful before investing in both in the longer run.
Re-evaluate Your Insurance Coverage
In your 40s, insurance can no longer be at the bottom of the priority pyramid. Whole life insurance, the most popular type of insurance plans in India, offer several top-up options, including receiving part of the funds in case of a terminal illness. The awareness and uptake of other insurance products, including term insurance, child education plans, family health plans, and group insurance, is low. For instance, only 45% of Millennials in India have heard of term insurance and less than 17% have bought such plans. It’s time to learn more about these. One can choose Unit Linked Insurance Plans (ULIPs), which invest part of your funds in equity, debt, or a combination of the two, depending on your financial goals and risk appetite. Investing in ULIPS via Systematic Investment Plans (SIPs) means you can start your wealth creation journey without a huge capital outlay.
Emergency Funds
Big expenses pop up without notice. Whether it’s a health issue, expensive home repair or loss of job, an emergency fund provides financial stability in what can be a time of chaos. At the age of 40 or before, it is imperative to ensure that one sets aside funds in the form of liquid funds. These debt funds invest in bonds with maturities up to 91 days and comes at a low risk and allows a higher returns chance as compared to savings bank account.
It’s a good idea to review your entire portfolio at the end of the year. Identify the areas that need adjustment according to your changing financial position and needs. Consider the tax implications of your portfolio, maturity of fixed income earnings, lock-in periods of investments, and global diversification. You have a couple of decades to grow your money. Take advantage of that.
(The author is Co-Founder & COO, Zopper)
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