How to cash in on your bonus
Rediff Getting a bonus calls for a celebration. With the right investment tools, you can put your bonus to good use and create wealth. Finance experts, Krishanmurthi Vijyan, CEO, JP Morgan Asset management; Rajivdeep Bajaj, MD Bajaj Capital; and Akhilesh Tilotia, financial advisor, tip you off. How should you invest your bonus? Krishanmurthi Vijyan: Calculate tax on the bonus. Most companies give their employees bonus only after deducting the income tax. If the net cost of debts is more than the cost of savings, you should pay off the debts first before you plan any savings. It is better to get rid of the high cost loans like personal loans and outstanding credit card bills. Next is investment. While investing for one year, go for a mix of 80-90% in debt and 10-20% in equity. A long-term investment should have at least 70% in equity and 30% in debt. As investors can't choose SIP to invest lump sum of bonus, you can certainly put the bonus in a debt fund first and the