The per capita income of India is getting increase year by year and the credit goes to the various initiative taken by the government. Youngster are getting placed in good Indian and MNC companies once they are out of their colleges and B schools. It results in increasing demand in Indian economy for the various products and services.
Money earned is partly spent and rest saved for meeting the future expenses, instead of putting the saving idle everyone wants to get a return on it in the future, therefore the investment mean putting money in something (Debenture, Share, etc) that will return some profit and interest in future.
But when it comes for an investment, we are in big dilemma Where to invest? Which property to buy? Which one is best mutual fund? Is insurance an investment or protection plan? Are company deposits safe? Is stock market my cup of tea? And the answers are as much confusing as the questions are!!!
Need for the investment:
- One invests to maintain a same living standard after retirement.
- For Daughter Marriage.
- To buy property.
- For Children education.
- For making provision for an uncertain future.
- To meet the cost of inflation.
But the proper guidance and suggestions are missing in an Indian financial industry and investors are ending up in buying the wrong investment products. Lots of things need to be done to create the financial awareness among the investors and distributors.
It is advisable to put a financial goal first to filter out the financial product, then look out the options available in that product, understand the features & benefits etc. and the first efforts needs to be taken from the investor itself: “Don’t blindly sign the contract document, fill it yourself, read it carefully, understand the terms & condition, keep a photocopy of it and ask as many questions as possible for the proper clarifications.
Option Available for investment:
1-Physical Investment: Gold/jewellery’s, Real Estate.
2-Financial Asset: Fixed deposit with bank, saving with post office/provident fund/insurance/mutual fund or in security market related instrument like share, debenture and bonds.
Example for an Insurance Planning:
We would like to share an example of an Insurance Planning with you, “you should have an insurance of 5-7 times of your annual income”, this is what the common insurance agents or the customer care executive of an insurance company will inform you know while pitching for an insurance policy. However in order to know how much insurance you actually required depend upon the following factors:
- Your Life Expectancy
- Life Expectancy of your wife
- Current household Expenses excluding your personal expenses
- Inflation Rate
- Goal for your children`s education or their marriage
- Outstanding loan if any
- Working or Non-Working Spouse.
These are the few very important factor which needs to be taken care while planning for an actual life insurance need for an individual, a CERTIFIED FINANCIAL PLANNER or a good advisor can help you in doing the right calculations with the help of future value and present value concepts.
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