managing your investments

Have you ever stopped to think, whether it is more paying for you to put in more hours to your job or to managing your investments?
The answer lies in your size of investible funds and your stage of career.
Let's look at the picture in a little more details below.
Case 1: Annual earnings- Rs 4 lacs p.a., Investible funds- Rs 40,000.
In order for your investment income to equal your potential pay rise when you put in more hours, your investments must give 10 times better returns compared to your job. Even if you go for equity investing, your returns on a sustainable basis may not exceed 20% per annum on an average. To equal this return you need only an additional 2% annual pay rise from your increased efforts.
Case 2: Annual earnings-Rs 6 lacs, Investible funds- Rs 3,00,000
Now to equal equity returns of 20% you may need an additional 10% annual pay rise from the same efforts.
Case 3: Annual earnings-Rs 15 lacs, Investible funds- Rs 15,00,000
When your investible funds equal your annual earnings, you would need an additional 20% pay rise from the same efforts, which may be difficult.
Case 4: Annual earnings-Rs 10 lacs, Investible funds- Rs 15,00,000
When your investible funds exceed your annual earnings, it is common sense that increased earnings from extra pay rise cannot match additional investment earnings.
It is therefore clear that till you have substantial investible funds, it is not prudent to give disproportionately high attention to your investment management. However, when you build up a sizable amount, the story is entirely different.
However, by the time you have built up resources in excess of 50% of your annual earnings, you are either sufficiently senior in your job or you are a reasonably valuable professional.In either case, your contribution at the workplace will have to be ever significant.In such a situation, therefore, it may be more beneficial to manage your investments through a professional agency and maintain your own focus on your professional advancement