If you are under 35 years of age, the ONLY risk that you should be worried is about your career. Wrong qualification, Wrong line, Wrong Country, Wrong Company, Wrong boss, Wrong technology – one bad choice and your life could take a downward spiral.

This is the biggest risk for all of you. Do remember that India is a young country so for you to retain your job beyond the age of 52-53 is a real challenge in the private sector. Na Mo is making it difficult even for the sarkari big bosses to survive in the government unless they are efficient. Even the government employees now have NPS and not an indexed defined pension. The only place where indexed pension is still available is in the defence forces.

The probability of you losing your job goes up substantially when the markets go down. However this should not mean that you ignore equity while building your portfolio. NOT MEETING your goals of life – like Retirement, children’s education, etc. is far greater than losing money in equities. So go and learn equity investing. When I say equity I mean equity mutual funds dominantly.

The biggest secret (which we all scream) is that a 22 year old kid who wants to put away money for his retirement is in a far, far stronger wicket than a 44 year old equity market whiz who is willing to put a higher amount. The latter has lost 22 years off from the compounding formula, and that cannot be replaced with a bigger amount…so youngsters start investing in equities. The risk is in your choice of skills, geography, technology, stupid company,……not in a big large cap oriented fund like Franklin Prima Plus.

Turkey shooting a Russian plane, Obama’s successor, ISIS, Na Mo not getting re-elected, infighting between Nitish and Lalu, NONE OF THESE is a risk in your portfolio. The risk that will keep you up at night is “did I make a right choice of company, technology, qualification, career,……”.

However the real big, hairy, scary risk is “If I am a few decades away from retirement will I accumulate enough to ensure that my money outlasts me”.

No other risk matters.

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  1. I see people switching jobs every two – three years for money. They do not understand that they will be at the receiving end sometime. I agree that these days, you have to remain employable throughout your working life. Companies take out the bottom performers systematically. Selecting the company is only part of the story. You have to continue achieving your targets.

    Getting laid off after 50 is a very real threat.

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