With constantly rising cost of living, education and
healthcare due to rising inflation and taxes, financial planning has acquired
greater significance than ever before to secure your financial future. While
you may think that keeping a little amount aside for the rainy day might help
but the fact is that this money keeps losing its purchasing power over the
years and your future security is going down the drain with it.
To ensure that your savings at least retain the original
purchasing power when you put them aside you need to explore healthy investment
options to help grow this money in an intelligent manner. It would not be
enough to go in for fixed deposit schemes or buy some fixed-income securities
because when you factor in for inflation and taxes at the time of maturity, you
may find that you got even lesser than what you kept aside.
To avoid such a situation, you need to consider alternativein vestment options which can bring in higher returns without escalating the
level of risk beyond your tolerance levels. The best option to multiply your
savings would be to invest in equities but they also involve a higher level of
risk but if one opts for mutual funds they can offer a good level of returns
without increasing the risk level that much. However, it requires choosing a
mutual fund which suits your individual requirements well enough.
Choosing a Systematic Investment Plan (SIP) would be helpful
in accumulating your savings in a convenient manner in which you would
regularly contribute a certain amount towards the mutual fund and you do not
need to worry about putting in a good amount of money. Equities mutual funds
offer the highest level of returns as they in turn invest in a wide selection
of stocks with a promise of good returns.
However, the risk level is again higher. Here everything
depends on your choice of the mutual fund plan, for which you can seek help of
a professional financial advisor. Alternatively, you can also choose to invest
in stocks directly with the assistance of expert advice. If you are still not
sure which stocks to choose, you can as well invest in index funds which offer
comparatively safe options for investment with positive returns.
You would need to open a demat account for that purpose. A
demat account can be opened with any registered stock broker at a nominal
fee and it lets you keep your stocks, bonds and
other financial instruments in an electronic form. This eliminates the risk of
theft or damage to your stocks or bonds and makes it easy enough to manage your
investments in an efficient manner. Ashlar Online offers free demat account
opening for traders and investors of all kinds and helps them make optimal
utilization of available resources to achieve desired results.
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