As Neel neared 45 years of age and both his children enthusiastically made plans for college, he reflected back on his younger days and wished he could go back in time and advise his younger self on financial matters. While his first job at an MNC had ensured he and his family receive life insurance, investments were something he had only begun concentrating on when he turned 35.
His children’s plans for college was definitely going to cause a dent in their savings, and he fervently wished he had begun investing much earlier when he had lesser responsibilities. He now knew that investments could range from across equity, debt or even to cover elements like gold which acted as a hedge against inflation; but he wished he had known that much earlier.
Now, he knew about mutual funds and the various ULIP benefits he could gain from investing with a reliable insurer. With the Easy Invest Online Plan, he was reaping benefits by paying premiums as low as Rs. 4,000 a month and getting both profitable returns as well as a life insurance cover.
Along with information regarding this specific plan and ULIP tax benefits he got, he wished his future self could have advised him on several other things, including:
Not using more than one credit card at a time while shopping:
Credit scores, which decide the loan one can avail at times of unexpected financial emergencies, are dependent on matters like how quickly loans have been repaid and how many credit cards are issued and how quickly bills are settled. Shopping is the quickest way to chalk up debt, and repaying it on the credit card gets harder. That’s why it’s best to use debit cards or cash while shopping.
Investing with an eye on tax exemptions:
Multiple investment instruments provide a host of benefits, but not all of them are totally tax exempt. While deciding whether to invest in a ULIP or mutual fund, ULIP tax benefitsmake them the better option. ULIP plans allow for tax benefits under both Section 80C and 10(10D), which are impossible to come by if you invest in mutual funds.
Maintain diverse investments:
While investments are important, it is also essential to not place all your eggs in one basket. ULIP benefits, along with acting as an insurance policy along with being an investment instrument, include perks like being able to invest in a diversified portfolio which could include equity funds, debt funds as well as a mix of both. This diffuses the risks of investing entirely in equity funds which do offer higher returns, but also carry higher risks; or investing entirely in debt funds which are less risky but also offer lower returns. While mutual funds do offer similar options of diversified portfolio, the choice of investing in a ULIP or mutual fund is often dictated by the fact that ULIP benefits include the freedom to switch funds at any time.
Decide upon short-term goals to achieve before setting long-term goals:
When one is young, it is easy to get carried away and influenced by friends who want to have a good time. However, it is important to plan for the future. At a young age, it is easier to set and achieve short-term goals rather than long-term goals. The ability to achieve short-term goals will definitely install the habit and discipline required to set and achieve long-term goals as well. Once you begin achieving the short-term goals, it is only a matter of time before the long-term goals look achievable as well.
Start planning for retirement from the time of your first job:
The older you get, responsibilities will only increase. As your income grows, so will your aspirations while your lifestyle choices will simultaneously improve. In between all this, it is important to keep an eye out for the day when you won’t be able to earn a steady income anymore. It is necessary to start making plans for how you intend to retire, and the resources you will require post retirement. Invest in assets that offer the highest returns over the long-term and ULIP benefits make them the best option for this specific purpose. ULIPsallow for systematic annual or monthly premium payments, thereby providing for long-term creation of wealth which will be a blessing once you retire. ULIP tax benefits also make them the ideal option for wealth creation.
There are a lot more options available to youngsters in terms of investment, since they can afford to take risks that are just not possible once they get older. However, it is important to take advantage of these options while the going is good. Plans like Easy Invest Online Plan is ideal for young professionals who want to avail the benefits of both insurance and investment, all at one price.