If you often wonder how to invest your money to grow your wealth in the future, you are not alone. Many out there have the funds to invest but lack basic know-how in choosing an investment plan in India. With the right investment decisions, you will be able to build wealth and grow your savings in the long run. The process of saving for wealth creation and securing your finances against contingencies is known as financial planning.
If you are looking to invest in the best investment plan in India, here are some steps you need to follow:
- Know Your financial goals
We all have different goals and expectations from our finances. One investor may want to invest in low-risk instruments for 10-15 years, while another investor has a high appetite for risk and may be willing to invest for an extended period. Before you start browsing an investment plan in India, you need to ask yourself about your financial goals. Do you need money for retirement, or do you need to save for your child’s wedding/education? Depending upon your goal, you will be able to choose the right set of investment instruments that will make up your portfolio. Experts say it is better to select financial instruments that require you to stay invested for a long time, especially if your goal is wealth creation.
- Assess your risk tolerance
With the volatile market conditions, investors do not feel confident about investing in risky instruments. Instead, they prefer to stick with low-risk financial products. However, if you want to make some serious gains, you need to invest in high-risk instruments, especially long-term financial goals. That is because a high-risk profile yields better results over a more extended period of time. However, if you have short term goals, it is better to invest in low-risk products. Simply put, your investment portfolio should maintain a balance between high-risk and low-risk instruments to secure your finances as well as grow your funds over time.
- Check for withdrawal facility
Let us assume that you invested every bit of your savings in an instrument that is generating good returns for you. But now, you need funds to buy a car or pay a down payment for a housing loan. What will you do in that case? That is why your investment plan in India needs to have instruments that allow you to make withdrawals to address these contingencies. You can look for products, such as ULIP, that come with a 5-year lock-in period, allowing you to make partial withdrawals after the policy period ends.
- Death benefit
A sole breadwinner’s untimely passing is not just a huge emotional loss but also a financial one. Suppose you have a family of dependents behind you. In that case, your main criteria in selecting the financial products for your investment plan in India should be protecting your family’s finances, especially if you are no longer there to provide for them. Therefore, you need to buy a life insurance plan with a death benefit that will enable your family to stay afloat, should something happen to you. Be sure to carefully choose the sum assured to cover all your family members’ needs and liabilities.
- Check out the brand’s reputation
Don’t just trust any service provider who promises you the best investment plan in India. You need to be thorough in your due diligence when planning to invest in a company. They should have a solid brand reputation and work ethic. This is something you can easily find out by researching them online. It is always better to transact with a company that comes highly recommended by your peers. So don’t hesitate to ask around for recommendations.
- Choose the right plans
An investment plan should be made up of instruments that make your money work hard for you. At the same time, it should also secure your finances in case something happens to you. A fine mix of FDs, ULIPs, bank deposits, and other such products can give you the best investment plan that meets all your financial needs.
Other than keeping all these tips in mind, you also need to ensure that the total premium and investments for your investment plan are affordable and sustainable in
