Whether you’re a working professional or a self-employed individual, you might have specific dreams you aim to fulfil. For realizing your life goals, money is an essential element. Many Indians might believe working rigorously would allow them to save more money than usual. According to the Aegon Retirement Readiness Survey of 2018, about 50% Indians are habitual savers. However, savings might not suffice since you park your funds in bank lockers without letting it be productive.
It is recommended to put your hard-earned savings in investment instruments, which allow its growth over the due course. Investing makes it easier to build your financial portfolio for meeting your life goals. Apart from this, let’s take a look at these top five benefits of investments mentioned below:
- Family security
Many investment options allow you to build a pool of funds to support your family, even in your absence. A Unit Linked Insurance Plan (ULIP) is one such financial product, which offers dual benefits of investment and insurance under a single integrated plan. It comes with excellent return on investment over the long term. As the breadwinner of the family, you should purchase the right investment instrument, which is not only beneficial for you but also your loved ones.
- Better returns
There are many investment products in the market, which provide returns based on the power of compounding. When you start investing early, you have more time in your hand and have a high-risk appetite. At a young age, you can invest in equity funds since you might shoulder fewer responsibilities. In simple terms, the earlier you invest, the higher chances of growth of funds over the due course.
- Tax deduction
Investment tools under Section 80C can reduce your liable tax. Many instruments like ULIPs, Public Provident Fund (PPF), National Pension Scheme (NPS), and so on fall under tax rules. Such type of investments allows you to save taxes. Therefore, you should consider various tax saving options to ensure you save more money.
- Disciplined investments
Every Systematic Investment Plan (SIP) can inculcate a disciplined habit of investment within you. When you start at a young age, you can develop a habit of investing regularly on a monthly basis. This can eventually help you to make smarter investment decisions and control your spending habits accordingly.
- Goal accomplishment
Investing helps you to generate income in the form of returns and bonuses. When you receive additional income, you build a fund for fulfilling your dreams. Many people might aspire to travel the world, buy a new car or a house, and so forth. You can achieve these dreams by investing in instruments like ULIPs, endowment plans without disturbing your monthly earnings and hard-earned savings.
After understanding the benefits, you should know how to make the right investment based on your needs and preferences. Let’s take a look at these few tips mentioned below for choosing the right investment option for you:
- Opt for a credible company, which can provide you with a life coverage as well as allow you to grow your wealth.
- Consider your risk appetite before you invest in a fund. For instance, if you’re an aggressive investor, invest in equity funds. If you’re a risk-averse individual, opt for debt funds.
- Compare multiple options and choose the right investment tool based on your financial goals and your needs.
- Diversify your investment portfolio to secure yourself from market volatility.
As highlighted above, there are multiple types of investment plans available in the market with various benefits. Before investing, identify your goals and make the right choice beneficial for you and your entire family. Choose an instrument, which brings you a step closer to realizing your life goals.
