Earning money is wise, and knowing how to invest and earn more is definitely wiser. The smartness of a person in terms of their financial management lies in their ability to keep themselves knowledgeable and prepared for future and to double their earnings. Nevertheless, the biggest question is, where and how to invest. This article will end your search for advises on enjoying your best return on investment EPF India website epfindia.gov.in. For a start, the two basic investment plan types are
1. ULIP (Unit Linked Investment Planning) – This planning lets your premium be invested in funds like shares, stocks etc. The money you receive is based on the performance of the funds, making the plan volatile.
2. Traditional Investment – This is where the promised amount you receive after maturity makes it a low-risk plan in nature.
Financial Planning Options
- Child Plan: Child insurance plans are to ensure the future of your child, covering the aspects of education to wedding and much more.
- Retirement Plan: Your investment in retirement insurance plan will provide you with a secure retirement life in terms of finance.
- Guaranteed Return Plan: Many insurance companies provide this plan after a significant period. This plan helps those people the most, who are unable to afford the high risk and seek for stability in earning.
- High Potential Plan: If you are wealthy and can go for high risk, this plan will work for you. Providing a chance of high return, the plan is volatile, involving risks. In this plan, the premium is invested in funds, with the return depending on the respective fund performance.
Alongside this, you can also invest in fixed deposits of banks and gold. These are short term investments, but can be converted to long-term depending on the nature of the investment.
Risks involved in Investment Plans.
Risks and investments go hand in hand. The basic risks you need to keep in mind while investing are as follows
- Unstable Market: Future can never be predicted, and so; with the fall in the market, you have a high chance of losing money.
- Inflation: With the rise of inflation, the value of the currency falls. This reduces your chances of getting the expected return.
- The collapse of Policy: With the collapse of the policy before maturity, you are likely to not get returns, rather face loss.
Selecting an Investment Plan
Keep these points in mind while choosing the perfect investment plan according to your capability and requirement
- Final Goals: Determine whether you want to invest in your child’s future or your post-retirement days or if you are simply looking to double your money.
- The term of Investment: Is your investment going to be for short term or a long term? Terminal plans will suffice your short term goals, while a 10-year or 30-year plan will be suitable to achieve your long term objective.
- The capability of Affording Risk: If you are young or wealthy, ULIP plans are for you, as those can provide high returns as well as involve high risk. As for senior citizens or financially weak people, conventional plans having stable return and low risk will do.
Investments are long term concepts and the choice for your plan must be carefully considered before actual execution, since it directly impacts your finance.