Here’s How You Create an Investment Plan That Works for You

Change is the only constant in this world. However, the one thing that does not change is the desire to have money. However, money can mean different things to different people. For some, it may be a hard currency, while for others, it could be the best investment plan that helps them grow their wealth.

Regardless of how you want the money, it is almost always required to meet certain life goals. Therefore, it is a good idea to consider a robust investment plan in India that can help you reach your goal. This article will discuss everything you need to know about the best investment plan and how you can get one.

Purpose Of Investment

Investment is an essential step to achieve your financial goals. It is the only way to secure your future and make it better. By making investments, you are not only able to safeguard the financial future of your loved ones but also accumulate a corpus that can be used for a wide range of purposes. Apart from that, an investment plan inculcates the habit of saving that helps you learn financial discipline in the long run.

Importance Of Investing

Inflation is a real-time concept that degrades the value of money and decreases your purchasing power.  When inflation is on the rise,  prices for almost everything increase, such as cost of living, commodities, healthcare expenses, etc. It is true that you cannot control inflation.

But what you can do is invest your money in the best investment plan to grow your wealth with the money you have now. It is only a matter of time when the money you invested will starts giving returns.

For instance, investments like ULIP provide comprehensive life coverage to your loved ones and also invests a part of your premium in market-linked products that yield returns in the long term. But What is ULIP?

ULIP stands for Unit Linked Insurance Plan, and under this plan, your premium gets divided into two parts – one that goes towards financing your life insurance policy, and the other part is invested in a combination of debt-equity funds based on your risk tolerance. It has a lock-in period of 5 years, after which you are allowed to make partial withdrawals to pay for any financial emergencies.

Types of Investments

You have a number of options if you are looking for the best investment plan in India. All you need to do is assess your risk tolerance and choose the investment instruments based on that option. However, before you take a nose-dive into financial investments, you must educate yourself about these instruments, riskiness, and return on investment.

For example, if you are looking for risk-free investments, then a term life insurance policy is a good way to start. They are pure insurance plans that primarily focuses on providing financial security to your family members should something happen to you. At the same time, if you are looking to grow your wealth, you can look at debt-equity investments that yield returns based on market sentiment.

Choosing The Best Investment Option

With so many financial instruments out there, it can be a daunting task for a first-time investor to build the best investment plan. Without a proper understanding of making investments, you may not even feel confident about where you should invest your money. Making a wrong decision can lead to losses. Therefore, here are some things you need to keep in mind when you are looking to build a robust investment plan.

• Start Young

When you are young, you have fewer financial responsibilities and years of investment ahead of you due to your long professional life. You can use that as an opportunity to invest in some of the best long-term vehicles. It will not only encourage you to develop a habit of saving but also help you increase your income over time.

That is why investments like mutual funds are considered to be a better option for young investors. But if you are risk-averse and do not want to take any chances, then look at safer options such as FDs. You can also modify your best investment plan as you grow older.

• Financial Goal

Your investment goals can either be short-term or long-term. When choosing an instrument for your investment portfolio, keep safe products for short-term goals and high-return potential investments for the long term.

At the same time, you may have some non-negotiable goals, such as your child’s education or down-payment for a new house. In cases like these, you must look for investment options that offer your guaranteed returns.

• Risk Profile

Another important factor to consider when choosing an investment option is your risk preference. You must also take your current income and financial dependents into account. A young investor with no responsibilities will be able to take more risks compared to someone with dependents.

These are just some of the many things you can keep in mind when looking for an investment plan in India. Expert insurance providers offer a wide range of financial instruments. Browse their websites to find the most suitable vehicle for your needs.