Did you know that nearly half of all New Year’s resolutions involve improving finances? And, of course, most don’t go through with their resolutions. Here are five simple changes you can make that will add a significant thrust to your overall portfolio over time.
1) Do your tax planning
Start doing your tax planning and don’t wait for the fag end of the financial year.
Consider an equity linked savings schemes, or ELSS, which are diversified equity funds that offer a tax benefit under Section 80C. It is also the only tax-saving instrument that offers the lowest lock-in period of just 3 years.
Having a Public Provident Fund, or PPF, is also a good option. It is a rather undisputed fact that the PPF, is one of the most popular savings route in this country. A combination of the assured returns, the safety and the tax break make it a winner.
2) Offload your debt
Any debt that does not give you a tax break should be cleared. So personal loans, home renovation loans, and auto loans should top the list. Education loans and home loans are the ones with a tax benefit.
If you have been running a huge debt on your credit card, clear it. At 2.5% per month, it may appear deceptively manageable. Not so. It amounts to an eye-popping 30% per annum. What’s more, every fresh payment made on the card has this rate of interest levied on it. Not a good position to be in.
3) Consider international investing
When investors are told to diversify, they instantly think equity and debt. Some will even go a step further and look for a break-down within these categories. For instance, within equity they will attempt to diversify their investments across value and growth, and industries. Within debt they will think of a combination of fixed return products as well as debt funds.
The more sophisticated and wealthier ones will move onto higher ground by contemplating along the lines of property, maybe even art and antiques.
Unfortunately, very few think of stepping outside one’s geographical boundaries. By ignoring global investing, investors are side-stepping a fair amount of weaponry in their investing arsenal.
Investors who never invest outside India are missing out on great returns.
4) Get a life insurance policy
Life insurance needs keep changing. The question of whether to buy insurance is not an investment question.
Life insurance is bought to protect our families from the contingency of untimely death. It would take care of the living expenses of your family if you were to die unexpectedly. Life insurance provides financial security to dependents. Term policies that cover the risk of untimely death are cheap and most ideal for providing life coverage. Paying a premium to cover the full financial needs of the family in case of the death of the bread earner is very important. The cover should be for about 7 to 10 times the annual income of the bread-earner. Few good term plan policies in market are MAX Life Term Plan & Click-to-protect from HDFC Life.
5) Don’t be afraid to ask for help
The very fact that you took interest in reading this article up to this point, it is but natural that you are willing to maximize returns on your investments. We are always there to help you. Please call Ketaki (+91-7045400514) for any guidance on your investments or email me on firstname.lastname@example.org.
Invest for a better Life.