Be Money Aware

What forms the basis of any business? Needless to say, every entrepreneur has to plan his investments accordingly in order to further grow his business. Although there are tons of investment options to select from, an investor has to carefully select only that plan which helps him reap maximum gains on investment. Therefore, every responsible investor should plan his investments early in the financial year which will eventually help him to save more money.

If you’re wondering how to invest money in a systematic investment plan (SIP), go through the following tax saving investment options. Take a look:

Importance of Investment Planning

Typically, investment planning is essential because it derives the maximum investment from your money. Since the success of every investor depends upon his selection of an investment vehicle, it is advisable to invest money in the right place. A policyholder can invest in stocks, bonds, and other security investments. Additionally, indirect financial investments like mutual funds, public provident funds, and so forth can be done with the help of mediators or the third parties.

The process of investing money allows the growth of money over the due course. If an investor is looking forward to meeting his lifelong goals, he must invest in that plan which offers a longer lock-in period. The choice of the investments should be compulsorily made on the need as well as the risk appetite of the investors. For instance, if you are saving for a dream vacation, do not purchase an investment plan with a lock-in period of 3 years.

Ways to plan your investments early in the financial year:

Cash flow

Managing the cash flow is the first and most crucial step towards making investment planning. Cash Flow management helps to manage the money that is debited into your account in the form of your incomes and is credited towards your expenses and investments. While a majority of people pay keen attention to their incoming money, the rest of them tend to ignore the outgoing expenses. With the help of cash flow management, an investor can keep monitoring his funds in the long run which will eventually help him to save more money.

Emergency fund

The next step towards planning for investments is by building an emergency fund. In order to create an emergency fund, the investor must purchase a life insurance policy. Investing in a life insurance policy means the provision of life coverage for the investor and his entire family in times of need. Therefore, see to it that you purchase the right type of policy like a Unit Linked Insurance Plan (ULIP) since it offers the benefits of investment as well as insurance under a single roof. It is advisable to develop an emergency fund at least 12 months’ prior for the hefty accumulation of funds.

Financial goals

Whether you have short-term goals or long term ones, it is mandatory to start investing in order to meet your financial goals. While the short term goals are buying a new house or a car, the long term goals are retirement plans or your daughter’s wedding planning. For short term goals, invest in Fixed Deposits or debt funds. In order to achieve your long term goals, invest in ULIPs or ELSS. Hence, understand your needs and make an investment accordingly.

Now that you know why you should plan your investment early in the financial year, what are you waiting for? Compare the multiple policies and then make the final selection of investment based on the features, benefits, and premiums. An ideal investment policy is the one which offers you with tax saving benefits and higher gains at an affordable rate.