Secure Your Future through Investment Plans

There was a time when everyone wanted a government job and there were reasons behind it. The first and foremost reason was the financial security and perks. Once, a person gets a government job, his financial situation used to be secured.

But, today, there are hardly any government jobs in the market. Consequently, most people go for private sector jobs. These jobs pay well and generally, the salaries are much higher than the government jobs.

At the same time, there is no security. Private sector jobs are said to be tumultuous ones. Private companies hire people with a condition that their services can be terminated any time. The notice period is also quite short – in the range between one week and 3 months.

So, that is the kind of insecurity private sector jobs bring. If the financial condition goes wrong, companies go for mass lay-offs. Plus, there is no provision for pension, in the private sector.

You have to save for your future by your own means, and there is no way out but to adopt financial discipline.

Are you living a financially in-insecure life?

If you are also working in a private sector company and feel insecure, then you have to act now. There are solutions available, but they work, only when you take a proactive approach and practice financial discipline.

The insurance industry in India provides for solutions. Guaranteed income plans are one of them. By investing in these Investment Insurance plans for a certain period of time, you can expect a guaranteed income which can support you in case you lose your job for any reason.

There are people who are able to replace their salary income by these plans. Yes, that is possible!

How to start?

Taking the first step is important. It is said that a journey of a thousand miles starts from one single step. So, the early you begin, the faster you will be able to amass financial resources.

The first step is to research and shortlist a few well-performing guaranteed income plans.

Considering that hardly a youngster of 18-20 years has patience and wisdom for investing in such plans, let’s assume that you start at the age of 30 years. By this time, you are well-aware of the financial uncertainties of your job, and can act smart.

The policy term of Guaranteed Income Plans start from 10 years and usually go up to 30 years. It depends on your present age. For instance, if you are 40 years old, you can go for a policy term of 20 years. The period can vary, if you wish to retire early or want to start getting stable income after a certain age.

Are there any additional benefits?

Many people think that investing in Fixed Deposit offered by banks is a viable option. They offer guaranteed returns. But the returns are quite low. They may not even match inflation rates. At the other end, Guaranteed Income Plans are a type of insurance plans, which offer several additional benefits which banking instruments do not offer.

For instance, you get a life cover under these plans. If in case you lose life during the policy term, your nominee gets a fixed corpus, which can support their basic needs. Further, there is a provision of accidental death coverage also.

Moreover, you can claim tax deductions of up to Rs 1.50 lakh every year. Section 80C of the Income Tax Act has provisions under which you can deduct you taxable income by up to Rs 1.50 lakh for investing in life insurance plans.

Bank deposits, at the other end, are taxable. The income from interest generated from bank fixed deposits is taxable, after a limit of Rs 1 lakh. This income adds to your taxable income, and can wipe out a substantial amount of your annual income in the form of tax.

Thus, it is advisable to invest in Guaranteed Income Plans and avail the aforementioned features, for a financially secured and prosperous life

.

[Source: http://www.policyx.com/blogs/financial-independence-how-to-replace-salary-income/]

Ten Investment Tips for Women

Studies show that a person’s attitudes and beliefs about money have a huge impact on how they view investing. In general, women have a tendency to let others make important decisions for them, and overall are less likely to take risks. This presents a problem when it comes to investing, which is primarily about risk and return.

Investing your money is important. It can give you financial security and independence, as well as prepare you for important life events — your children’s education, your retirement, unforeseen financial emergencies. Even if you use the services of a financial advisor, be prepared stay in control of your investments. Although this may sound overwhelming at first, there are a few basic investment guidelines that you can use to enrich your future:

1. Educate yourself

The investment world has many different avenues that range from Certificates of Deposit (CDs) and Treasury Bills (T-Bills) to stocks, bonds, and mutual funds. The more you know, the better your chances of becoming a savvy investor. Read Seven Principles of Successful Investing for a good introduction to the topic.

2. Set clear financial goals.

Decide what you need to do to make your future secure and enjoyable. This can include everything from starting a retirement fund to starting to put aside funds for college, medical expenses, vacations, real estate investments, as well as an emergency fund for any unforeseen events that may drain your savings.

3. Create an investment plan.

Once you have set your goals, you need to create a solid investment plan. First, determine how much money you have to invest, and start thinking about how to make your money work for you to achieve your financial goals. Rather than a set of rules, an investment plan provides guidelines that can help you organize and direct your energies. Financial plans should have continuity and a solid foundation, but at the same time be adaptable to changes that invariably happen in life. For more on financial planning, read Developing a Personal Financial Plan.

4. Hire a financial consultant.

Consulting with a professional investment counselor can give you an edge in creating your investment portfolio. Using a mutual fund is a way to hire a financial consultant without spending a lot of money upfront. Financial consultants can sometimes be fallible, which means you should always take an active role in your investments. For more information on how to begin this process, read Hiring the Ideal Personal Finance Advisor.

5. Diversify your portfolio.

When setting up an Investment Insurance portfolio, you should make sure to diversify your investments; that is, make sure the risk is spread out and not all focused in one place. Some investments are safe but have little return (bonds, money market, treasury bills), whereas other investments come with a greater risk and thus a greater yield (stocks, funds, and futures). Also, some investments work better on a short-term basis, while others are better over the long term. By diversifying your financial portfolio, you create more security for yourself. For more on this, check out Diversify Your Investments.

6. Set up an emergency fund.

You should safeguard your finances by setting up an emergency fund to deal with potential problems that could drain your finances (such as unforeseen medical or legal problems). Building an Emergency fund contains helpful information on how to get started.

7. Plan for retirement.

You should prepare for that time when you will no longer be working and collecting a regular paycheck. Keep in mind that the earlier you start, the longer the money can benefit from compounding. So if you don’t have a retirement fund already in place (for example, a 401(k) or an IRA), start one immediately. Read 401(k) Basics and 10 IRA Strategies to get started.

8. Avoid high-risk investments.

High-risk investments are like gambling on long shots. On the whole, you have to be prepared to lose your money. Even in the world of stocks and futures, some investments are much riskier than others. Avoid Risky Investments provides a good overview to this issue.

9. Monitor investments on a regular basis.

You are ultimately in charge of your finances, and because it’s your money that is being invested, you are the one who stands to profit or lose. Always stay informed about what is going on in the different financial markets that hold your investments.

10. Be open to new ideas.

You should be adaptable and change your portfolio to reflect what is happening both in your life and in the world around you. Be aware of both financial and cultural trends. Keep up-to-date by reading business and financial journals, newsletters, magazines, and Web sites.

[Source: http://webcash.in/2012/06/29/ten-investment-tips-for-women/]

10 Investment Options in India

With a control free economy, supported by expert banking facilities, Indian capital market offers a plethora of investment options both for residents and NRIs. As per the investment plan an investor should thoughtfully select the best option available in the capital market that meets his requirements.

Top Investment Options

While some plans accrue short term profits some are long term deposits. The first step towards investing in Indian market is to evaluate individual requirements for cash, competence to undertake involved risks and the amount of returns that the investor is expecting. Below are Top 10 Investment Options in India which assure safe and satisfactory returns.

Investments in Bank Fixed Deposits (FD)

Fixed Deposit or FD is accrues 9.25% of annual returns for non-senior citizen, depending on the bank’s tenure and guidelines, which makes it’s widely sought after and safe investment alternative. The minimum tenure of FD is 15 days and maximum tenure is 5 years and above. Senior citizens are entitled for exclusive rate of interest on Fixed Deposits; current rate of return is average 10% annual.

Investments in Insurance policies

Insurance features among the best investment alternative as it offers services to indemnify your life, assets and money besides providing satisfactory and risk free profits. Indian Insurance Market offers various investment options with reasonably priced premium. Some of the popular Insurance policies in India are Home Insurance policies, Life Insurance policies, Health Insurance policies and Car Insurance policies.

Some top Insurance firm in India under whom you can buy insurance scheme are LIC, SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sunlife, HDFC Standard Life, Reliance Life, Max NewYork Life, Metlife, Tata AIG, Kotak Mahindra Life, ING Life Insurance, etc.

Investments in National Saving Certificate (NSC)

National Saving Certificate (NSC) is subsidized and supported by government of India as is a secure investment technique with a lock in tenure of 6 years. There is no utmost limit in this investment option while the highest amount is estimated as ` 100. The investor is entitled for the calculated interest of 8% which is forfeited two times in a year. National Saving Certificate falls under Section 80C of IT Act and the profit accrued by the investor stands valid for tax deduction up to ` 1, 00,000.

Investments in Public Provident Fund (PPF)

Like NSC, Public Provident Fund (PPF) is also supported by the Indian government. An investment of minimum ` 500 and maximum INR. 100,000 are required to be deposited in a fiscal year. The prospective investor can create it PPF account in a GPO or head post office or in any sub-divisions of the nationalized bank.

PPF also falls under Section 80C of IT Act so investors could gain income tax deduction of up to ` 1, 00,000. The rate of interest of PPF is evaluated yearly with a lock in tenure of maximum 15 years. The basic rate of interest in PPF is 8%.

Investments in Stock Market

Indian Stock market is very fluctuating. A smart portfolio positioned for long-term growth includes strong stocks from different industries. Before investing in stock market one should be prepared to assume risk equivalent to sum invested in the market. Investing in share market yields higher profits. Influenced by unanticipated turn of market events, stock market to some extent cannot be considered as the safest investment options. However, to accrue higher gains, an investor must update himself on the recent stock market news and events.

Investments in Mutual Funds

Mutual Fund firms accumulate cash from willing investors and invest it in share market. Like stock market, mutual fund investment are also entitled for various market risks but with a fair share of profits. One should select mutual fund schemes based on all or some of the following criteria:

Long term and Short Term Performance
Consistency in Returns
Performance during bullish and bearish phases
Fund Managers performance with the fund’s operations

A simple way to select a mutual fund scheme to Investment Insurance Policy is to select a 5 star or

4 star rated fund from one of the following rating agencies:

ICRA Ratings
Value Research Online
Money control

Investments in Gold Deposit Scheme

Controlled by SBI, Gold Deposit Scheme was instigated in the year 1999. Investments in this scheme are open for trusts, firms and HUFs with no specific upper limit. The investor can deposit invest minimum of 200 gm in exchange for gold bonds holding a tariff free rate of interest of 3% – 4% on the basis of the period of the bond varying with a lock in period of 3 to 7 years.

Moreover, Gold bonds are not entitled of capital gains tax and wealth tariff. The sum insured can be accrued back in cash or gold, as per the investor’s preference.

Investments in Real Estate

Indian real estate industry has huge prospects in sectors like commercial, housing, hospitality, retail, manufacturing, healthcare etc. Calculated realty demand for IT/ITES industry in 2010 is estimated at 150mn sq.ft. Around the chief Indian cities. Termed as the “money making industry”, realty sector of India promises annual profits of 30% to 100% through real estate investments.

Investments in Equity

Private equity is a type of asset consisting of equity securities in private companies that are not publicly traded on stock exchange.
A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor.

Private Equity is expanding at a fast pace. India acquired US $13.5 billion in 2008 under equity shares and featured among the top 7 nations in the world. In 2010, the total equity investment is predicted to increase up to USD 20 billion. Indian equities promise satisfactory returns and have more than 365 equity investments firms functioning under it.

[Source: http://webcash.in/2012/06/29/10-investment-options-in-india/]