Best Investment Plans: Middle class people invest their future by investing a small part of their monthly income. Any investment, whether big or small, should always be made only after due diligence. Never spend your hard-earned money thinking that others are doing so. So let us know how to choose a good investment plan and what things to keep in mind.
Every person wants to earn more money and fulfill his needs as well as his and his family’s hobbies. The middle class family of the country considers investment as the best way to increase their wealth.
A middle class person secures his future by investing a small part of his earnings every month. But the matter gets stuck here as to which plan to invest in. Nowadays there are thousands of investment options available in the market. Due to which a common man who does not have much understanding of investment remains very confused as to what to invest his money in.
Any investment whether it is big or small should always be done after checking. Never spend your hard earned money thinking that others are doing it. So let us know how to choose a good investment plan to invest and what things to keep in mind.
Keep these things in mind
Know your financial goals
Every investor has a different goal. One investor wants to invest for 10 to 15 years and the other wants to invest for 20 to 25 years. Some people want to make short term investments while others look for long term investment options.
Before investing, always ask yourself what is your goal. Your financial goals range from owning a house, retirement planning , children’s education to marriage etc. Depending on the goal-setting, you can choose from various investment options like PPF, Fixed Deposit, Mutual Fund and ULIP etc.
Assess risk
Every investor wants his invested money to double during the day and quadruple at night. But he also knows that the money invested is subject to market risks, so you must always assess how much risk you can take.
Don’t ignore brand value
If you are one of those investors who do not want to take huge risks and do not do detailed research before investing, then you should not ignore the brand value. Choose an investment instrument that has a strong presence in the market and is known to everyone. Apart from this, you should also see whether his financial position is strong or not.
How to choose a good investment plan?
Return on Investment (ROI): ROI is often placed above all other metrics when it comes to assembling one’s portfolio. Government bonds and fixed deposits have always been the first choice for the Indian middle class to provide security and guaranteed returns.
It is a good option to choose an investment option which has grown above the average inflation rate over the last few decades. In India, prices have increased by an average of 7 percent over the last 40 years. This means that you should choose such an investment option whose ROI is not less than 7 percent.
Keep in mind taxation: It is obvious that if you invest with the intention of making more money, then try to choose such an investment plan which gives you tax benefits. Tax-free investment options typically include pension plans, insurance and government-sponsored savings plans.
If you want to invest in mutual funds, stocks and other such financial instruments, you need to understand how your earnings are taxed.
Liquidity: It is very important that you are prepared for both good and bad events as things can turn bad at any time. Such situations demand a certain level of liquidity in your investment portfolio. What is the use of that money if you cannot withdraw it at the time of your choice?
Short-term investments are generally highly liquid and a good place to park your cash. Recurring deposits, liquidity-loan funds and large-cap mutual funds are some examples of highly liquid investment options where money can be withdrawn almost instantly.
