With his vast experience in dealing with money, be it treasury or investment and portfolio management, Mr Nirakar Pradhan, Chief Investment Officer, Future Generali Life Insurance , is well-placed to tell young investors about money-related matters. With a doctorate in Business Administration, Mr Pradhan has had several stints abroad, including one with SBI in Germany.

This week, he shares some of his money ideas with Business Line .

What does money mean to you?

Money is a very important tool for achieving one's financial goals in life. Requirement of money arises not once but at various stages of life. So it is not only important to earn money, but also to keep the money safe and earn a good return over it.

What are your top financial goals?

I would like to have a portfolio that would take care of my post-retirement expenses after providing for my children's education. Accordingly, my plan is to build a personal portfolio based on safety and reasonable liquidity and at the same time generate a return of 15 -18 per cent every year. To achieve this, I plan to stay invested mostly in equity of blue chip companies and real estate.

What proportion of your money is invested in debt equity real estate and gold?

My current portfolio comprises bank deposits 10 per cent, equity 50 per cent and real estate 40 per cent.

Tell us about your most successful investment... the one which made the most money for you?

Buying into real estate in 2009, based on positive correlation between equity and real estate, immediately after UPA Government came to power has been a very successful investment. This has given excellent capital appreciation of over 20 per cent every year over last two years.

What is the one mistake on investing or saving that you regret?

I regret selling some blue chip stocks in the bear market of 2002; the stocks didn't give a re-entry point after that and have increased manifold since then.

How do you plan your investments to beat inflation?

In my opinion, investment in equities is a good hedge against inflation. In an emerging market such as India, where inflation is bound to remain high most of the times, fixed income instruments are not adequate to provide good avenues to beat inflation.

What's your message on saving, investing to young people just starting out on their career?

It is important to understand that Indian capital market is one of the most attractive in terms of risk adjusted return in the world. Sensex has yielded an average compounded annual return of 18-20 per cent over the last thirty years. To capture these attractive returns from the market, one should start investing early in his/her career. SIP is a good tool to go about investing small amounts right from the beginning and reaping the reward at the end of your career.

Young people usually don't take interest in long-term investments and tend to look for short-term gains. This often leads them to riskier investments and if the investments fail then they usually lose faith in the very concept of investment.

You have vast experience abroad. Is the approach to savings by youngsters different in developed countries compared with India?

Given the social security network available in the developed countries (government pays allowance to the unemployed youth and provides pension for the elderly), youngsters in those countries give less importance to savings and investments. However, youngsters in India value savings and investments.

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