The sooner you start investing in your future the brighter your future will be. When people invest they should have clear objectives and expectations from their investments. Different investment instruments have varied returns, risk element and liquidity. So, while planning your investment portfolio you must set the right expectations from a particular investment instrument. For example, if you have strong risk appetite and want to grow money a major portion of your portfolio should comprise of equity based instruments like stocks, participating ULIP plans etc. And if you want to play safe and desire regular flow of definite income, then debt based instruments should form bulk of your investment portfolio, like debentures, government bonds etc.
You should set an investment benchmark and channel your monetary resources with acute precision. The essence of investment is to compromise on present enjoyment and yield the benefits in later life. You need to categorically decide your long term investments and short term investments. For short term gains people do trading on stock market or invest in money market instruments. If you have long term investment goals SIP, bullion, FDs and real estate are best bets.
Life insurance is also a very popular investment tool. Investment in life insurance plans makes you eligible for tax deductions. Some insurance life insurance plans have features of both insurance and investment, i.e., they provide both maturity as well as death benefit. An important part of your investment portfolio should thus, be comprised of life insurance plans as there should be financial plans in your investment armory to look after your family in case you meet unfortunate demise during your working life.
Life insurers also have plans to benefit you in your old age. For example pension plans. By investing in pension plans you are receive monthly income in your old age. That keeps intact your dignity and self dependency. By starting the investment in these plans in early years of your life gives you the leverage of retiring earlier. Everyone wants to be in a situation wherein instead of you working for money your money work for you.
Another important tip is compare plans or investment schemes of various companies before investing. The feature and advantages vary from company to company and with effective market scrutiny one saves a lot of money. Take educated steps. Get as much information from the internet or books. Don’t shy away from taking professional assistance where need is felt for the same as financial planning and portfolio designing are highly technical stuff.
Your investment arsenal should be a mix of high growth/high risk instruments and low growth/secure instruments as wisely explained by famous investor and one of the world’s richest men, Warren Buffet, “Don’t put all your eggs in one basket”.
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