Beating Inflation, Guarding Safety

I am a senior citizen. Keeping in mind safety and inflation issues, please advise how I should invest Rs 25 lakh.

Since you are quite aged it would be advisable, considering that you want to invest such a big amount, that you should consult a financial advisor. There would be a hierarchy that needs to be established. Are you a dependent or are you looking for a source of regular income? If you are dependent then first of all you should invest Rs 15 lakh in the senior citizen investment plan which is available in all Post Offices. You get 9 per cent guaranteed return. There is no uncertainty in that.

When your income requirement is fulfilled through this investment, then you can invest the rest of your money in equity or risky areas where there might be some losses in the short term, but in the long run, it would be ideally placed to beat inflation and garner good returns. Since this is a volatile investing segment you cannot depend on it for regular income.

This article was originally published on February 24, 2010.