Jai has been offered an overseas project that requires him to stay abroad for three years. He got married recently and is looking at this posting as an opportunity to earn additional income. He has been thinking about how he should invest the surplus he will earn abroad after covering all major expenses. His friends suggest that he buys a house in Delhi, where he is likely to return after his international posting. His parents think he should accumulate the savings in safe instruments such as bank deposits. His wife thinks they should buy gold jewellery and invest the rest. What factors should Jai consider before making his decision?


Jai is still in very early days of his career. The additional income he would make from his posting provides an opportunity to build some wealth. However, the primary consideration should be ensuring flexibility to use the assets he will build, depending on his need. The objectives that should drive his choice are growth in value over time and liquidity to access the funds if and when needed.

Buying a house in Delhi might be an attractive choice for the possible appreciation in value. However, if Jai’s posting is extended, or if he makes a choice to work elsewhere, or if his performance results in more international postings, the investment in the house might be of little use to him. At a time when his career choices need flexibility, the house is an inflexible investment. Jai could make a smaller investment in a house, with the explicit intent to sell and release the funds if needed. He should desist from buying a dream house with his new wealth when it is unknown if he would live in that house.

Dos and don’ts to manage wealth and plan finances if you come by surplus money or windfall gains

How does one manage their wealth in case of a windfall gain or unexpected surplus? Do you invest it, pay your debts or just fulfil all your lifelong dreams? In this video, we tell you the dos and don’ts to keep in mind if you come by a large sum of money. Based on text by RIju Mehta

To buy gold would also be a limiting choice, since it may turn out to be an illiquid investment and draw a high emotional price. The choice of asking his wife to liquidate the jewellery might be expensive and tough to make. Bank deposits are a safe choice, but do not provide growth in value. Jai may be better off choosing a mix of investments in the assets that are being proposed, keeping a small investment in a house that he may be ready to sell if needed, a proportion in jewellery to keep the wife happy and some amount in bank deposits and mutual funds to ensure ready liquidity and higher flexibility.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

Read more: EconomicTimes

Share.

Leave A Reply