Age of an investor is and important determinant
of financial goals. Also financial goals and plans
depend on the income, expenditures & cash
flow requirements of an individual.
As per financial planning investors have been
segmented according to certain stage in their
life cycle
Sr.No. |
Life
Cycle Stage
|
Financial
Needs |
Ability
to Invest
|
Choice
Of Investments
|
1. |
Childhood
stage |
Taken care
by parents |
Invesment
of gifts
|
Long term
|
2 |
Young Unmarried |
Immediate
& short term
|
Limited
due to higher spending |
Liquid palns
& short term investments. Some expose
to equity and pension products |
3. |
Young Married
Stage
|
Short &
Intermediated term. Housing & insurance
needs. Consumer finance needs |
Limited
due to higher spending. Cash flow requirments
are also limited |
Medium to
long term investments. Ability to take risks.
Fixed income, insurance & Equity products. |
4 |
Young Married
with Children
|
Medium to
long term needs. Chidren's education. Holidays
& Consumer finance housing |
Limited.
Financial planning needs are highest as
this state is ideal for disciplining spending
& saving regularly |
Medium to
long term investments. Ability to take risks.
Portfolio of products, for growth and long
term. |
5 |
Married
with older children |
Medium term
needs for children's education & marriage.
Need for pension, insurance & higher
medical cover |
Higher saving
ratios recommneded. Requirement for intermittent
cash flows higher. |
Medium term
investments with high liquidity needs. Portfolio
of products including equity, debt &
pension plans. |
6 |
Retirement
Stage |
Short to
medium term |
Lower saving
ratios. High requirement for regular cash
flows. |
Medium term
investments . Preference for liquid and
income generating products. Low appetite
for risky investments. |
