Follwing information may be useful for you.
- Tax Planning & Investments is extremely important tool for Financial Planning & Freedom.
- You should start seriously start looking into these aspects for short term as well as long term.
Overlooking them now will put you in deep trouble because of following reasons:
1 - Due to massive increase in crude oil & commodity prices the complete global environment is already changing
2 - Currency markets, Equity markets as well as Business environment is changing.
Due to inflation your Savings as well and future well being will be effected negatively and increase stress. Salary increments etc. will be of not much use.
Some of the things to look into are:
1 - Save Taxes: Tax is direct loss of income, try all ways to save tax. As mentioned by me earlier investment in ELSS Schemes & ELSS SIP (Systematic Investment Plans) is best way to save tax. You have Max. limit of 1 lakh to invest per year for this and there is no reason why you should not invest. You can subscribe to SIP that will allow you to invest certain money every month for ELSS and you will not need to run around at the end of the month. I have checked that ULIP, UTI schemes and combined Insurance+Investment schemes are not good way. Treat Insurance saperately and Investments saperately. If you ahve no time to analyze thuis, then SBI Magnum Tax Gain scheme is the most trusted ELSS scheme in India. Having a SBI Magnum Tax Gain SIP plan will allow you to not run around for investments at the end of the financial year. By visiting SBI Mutual Fund office (not the SBI bank branch office) you can invest in this by just filling the fund and no transaction charges (entry loads normally 2.25%).
2 - Demat & Trading: For most investments you need a Demat account and online trading account. I use ICICI direct Trading and demat account. It allow you to invest in Stocks, Mutual funds (like SBI Magnum ELSS), ICICI General Insurance as well as ICICI Life Insurance plus FDs etc. SO you can by all of these online without any documentations. It also allow trading in commodities and overseas trading but that require more documentation. I think that its necessary for all investors to have Demat & Trading account, without thsi you will not be able to take right decisions at right time, due to cumborsome documentation you will keep avoiding investments.
3 - Mutual Fund Investments: Investment in equities is considered risky buy investments in Mutual funds at right time (when market is low) is quite justified decision. But Mutual fund investments are mostly for long term atleast 1 year preferably 3 years. Do you know that most well known mutual funds give 30%+ returns per annum, and many have given 150% or more returns in last 3 years. This is much higher then returns on Real Estate. If you do not have enough money to buy real estate, then its very important to invest money in Mutual funds. This will allow you to increase you money rapidly in 2-3 years and then you can consider investment in real estate. Divercified Funds, ELSS and Index Funds are considered best investment options. you can find best of them in moneycontrol.com
4 - Short Term investments - ETFs: ETFs (Exchange Traded Funds) , These are least known but most useful short term investment options. These are like Mutual funds but you can buy and sell them like Shares on the Exchange . They are mainly created to make investments easy, low cost and liquid. You can buy and sell them on same day with transaction costs same as equity shares. Also pverall theya re less risky compared to equity shares. Some examples of the ETFs are
Benchmark Nifty, This is index ETF, means its price is 1/10th of the Nifty (NSE) index. and if you buy 1 share of this you actually invest in All shares under Nifty index and if nifty go up and down , this also go up and down. If you are just sure that stock markets will go up (without knowledge of which sectors and companies) then you cna buy this and you will benefit equally.
Benchmark Goldex, If you think gol prices will go up, just buy one or more share of this and you can benefit from it without having to buy the gold in reality. Gold is a commodity.
Benchmark Bankex , If you think banking sector stocks will go up , then just buy this and you will benefit equally if the stocks go up.
Benchmark Liquid, You can invest in this if you want almost zero risk, buy shares of this and if interest rates go up you will benefit. you will normally get returns little higher then FD but unlike FD you can buy and sell this anytime.
http://www.benchmarkfunds.com is most known company in India for ETFs though UTI, Kotak and ICICI also have recently launched some ETFs. To buy ETF you just need a demat and online trading account like for shares.
ETFs are considered best investment method internationally. In India ETFs are very few but in last 1 year lot of new ETFs being launched.
ETFs are something between Shares and Mutual Funds. They are as easy to buy and sell like shares but they are as secure as Mutual Funds.
You should explore such investment options for personal Investment & planning.
Thanks
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