Investments are a must-have in this age. Not only do they allow you to create a corpus for savings, but they also enable them to earn good returns on their savings and can even generate regular income if done with in-depth research. The investments you make should be able to help payout in the long run and high enough to beat the heat of inflation. Investors need to be mentally prepared and not expect results to appear instantly or should be able to not access their funds for the lock-in period of an investment.
Before you make any investment decision, take an honest look at your entire financial situation, especially if you've never made a future investment plan before.
What You Invest In
Your investment portfolio should consist of products that match your needs and work towards achieving your goals. But how do you determine which products are suitable for you?
A variety of financial products provide many benefits today; however, they are complicated. It is crucial to understand these products before making a future investment plan. Knowing the intricacies of the products will ensure that they not only meet your needs but also provide higher profitability or financial security.
For instance, if you are looking for investment along with a life cover, you need ulip plan,money-back, or endowment policies.
As life is uncertain,it is vital to prepare yourself for unfortunate events first by getting the right insurance for you and your family.
Things To Consider
Investing if done right can help you build wealth in the long term. Here are some points that you must consider while investing:
- Set your financial goals
- Know your risk profile
Knowing your risk profile is a crucial step in your future investment plan formulation as the return is dependent on the risk undertaken. More significant the risk, the higherthe profits.
- Create a Future Investment plan
After ascertaining your risk profile, you need to create an investment plan through which your money can be used to buy investment products regularly while maintaining the principle of diversification to minimize the risk incurred.
- Choose asset mix
Asset mix refers to the breakdown of your financial portfolio of securities into its constituents. The asset mix should be in line with your risk appetite.Ideally, you should begin with the essential life and health covers to protect you and your family against any misfortune. You can then indulge in investments such as Capital investments, Retirement investments,or even more aggressive investments to yield a higher profit.
How Does Ulips Help?
A ULIP (Unit Linked Insurance Plan) is your gateway to cost-effective market-linked investments. It is a market-linked product that gives you the dual benefit of insurance & investment.
Although term insurance plans fulfill the life cover and tax-saving parts, they do not offer any return. ULIPs, besides the tax benefits of up to Rs 1.5 lakh under Section 80C of the Income-tax Act, 1961, can be instrumental for long-term goals. It offers a minimum sum assured equal to 10 times the annual premium for investors below the age of 45.
Another benefit of Ulips is that it has a long lock-in period of 5 years that inculcates a habit of saving. Flexible Ulip plans from reputable insurers such as Max Life Insurance provide multiple fund options depending on your risk profile.
There are three main types of Ulip plans:
- Ulip for Retirement
- Ulip for Wealth Creation
- Ulip for Child
Wealth creation can be tricky business, buttaking the right steps can make your future investment plans easy and smooth.
