The very fact that information available is abundant allows me write about any random topic. This has amazed to the extent that i have to write a small blog on investments and tax returns.
The strategy here to investment is simple "You are the master of your wealth", You need to plan your investments at the right moment.
Few weeks ago, group of our friends were discussing about investments and tax returns. You know the reason, its time to submit to investment and tax proofs. If you have not planned your investments earlier, then you will surely feel the pinch in your pocket during this time of the year. Durin this period with lot of haste and hassle we might end up being a scape goat to financial products.
Here is a small list of things that we (friends) thought will be useful for tax savings and financial investment.
Rule of Thumb: Double check your investment portfolios every 6 months.
Current Day Scenario: With the interest rates that are afforded by the banks on FD, NSC , PPF (6 - 7%) and the current inflation rate is surging ahead with 6-7 %. Our Profits earned on returns on these investments after few years will be cancelled out by the growing inflation rate.
Another financial advice that i learnt a hard way is not to invest on health insurance as a "Software Engineer", the key here is the profession.
Investing on more than 1 Life Insurance policy might not be a good option, proper analysis and guidance is required in this case. In the current scenario, small investments as "buckets" with immediate returns ( 6 - 12 months) is required and helpful.
With the above intiative other friends joined the discussion and gave their thoughts and view.
This is what Arun had to say,
1) Insurance is for Insurance, returns are only for ur family in case something happens to you, hence always go for Term insurance(which has 0 returns). If you want returns invest in MF. Never invest in LIC for returns.
2) Do not invest just to save tax, sometimes u lock the money unnecessarily, when you want liquidity.
3) Dont go for ULIPs(never)
4) Open a PPF acc, min amount per year is 500, so good to open.
5) Health insurance is good. But if your company covers for you and your parents, think about it. Most health insurance companies
donot issue new insurance after 60. So in case, you are planning for your parents, do it when they are around 55-59.
6) Another type of quick investment is : "Ultra Short Mutual funds". these funds provide mimimal returns but will yeild dividends per day, hence if you do not have a place for storing liquid cash which you may use up in next 3 months, this is a very safe place with returns.
7) Please read this blog regurarly, very good one :
With the above comments/views the discussion went on to the next level and we had more people on the discussion table.
Another friend of mine Gopalakrishanan had interesting views,
if you are looking for investments over and above the 1 lakh cap , you should seriously consider investing in gold which is time-tested.
Although we know about buying physical gold , investor also has the option for buying GOLD ETF's. This eliminates the burden of safe guarding physical gold, but it comes with a small extra charge, but will be pretty less than the locker deposits in banks. Benchmark Gold ETF's are presently pretty good since they have the least charges. One can also trade on other commodity ETF's which have a good upward trend.
As you all can see the information just kept flowing, it was great and amazing medium to exchange information about something you are not aware of.
I just pulled this out from my friends comment "Advice is cheap, hence think over and decide about what you should do and what is good for you about investments". The idea here is to be a proactive investor and not a passive one.