"The Five Investment Essentials"

Harish Rao has a column in The Mint on investments that are "a must for anyone in today's investment climate".

1. Term insurance : Aggressive life insurance is possible only through Term products. For example a 30 year old can get a Rs. 1 crore cover over the next 25 years at just Rs. 3000 per month. Definitely a must-do.

2. Health insurance : An unquestionable necessity. Again, for less than Rs. 1000 a month, a whole family can be adequately insured with a floater plan. And there are tax benefits to this.

3. PPF : the # 1 Fixed Income investment vehicle. Truly EEE (Exempt from Income Tax at every stage, plus, eligible for tax benefit under Sec 80C). No bank can match the post-tax returns of PPF.

4. Retire Debt : Want the best returns? Then retire all debt, be it credit card or personal loan. This also sets your cash free in the future. Cut spending now if you have to, but just pay off your creditors.

5. Start a SIP : Systematic Investment Plans (SIPs) are the best way to create wealth for the long term. Start one in 2-3 good diversified equity schemes. Start with a 3 year time frame and review the performance once a year. If the funds are still in the top quartile, then persist for the next 3 years. With the markets at a depressing low, there has never been a better time to get into equities.