There no better time to review your financial portfolio than the end of the year. Year-end is the best time to rectify your mistakes and take a fresh approach towards your investments. It is time to re-assess better financial strategies for a better outcome in the year 2020.
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Now that you are working and your finances are no longer controlled by your parents, you need a better understanding and control of your finances. It makes sense to diversify your investments rather than keeping your options restricted. Take some time off work and review your investment portfolio. Assess your investments, go through your tax outgo, assess your spends, go through your bank statements and identify the loopholes. If you want a better outcome, go through the list below and try to incorporate them into your new investment plan:
ULIP is an investment option which is a blend of insurance and investment product. The main objective of unit-linked plans is to provide insurance coverage along with an avenue to create a corpus. This can be a sure-shot investment product for millennials as they can achieve two targets with one investment.
See Also: Types Of Investment Plans
When you subscribe to a unit-linked plan, the insurance company invest a portion of your investment in life insurance and puts the remaining amount in equity or debt-based products. Thus, these plans can be used to achieve long-term investment goals like retirement savings, children marriage or education etc. ULIPs also come with benefits like tax-free withdrawal; low-cost availability and easy switching between funds minimize market risks.
A PPF is a tax-efficient investment option that enables subscribers to save on annual taxes while saving to build a corpus. It is a long-term investment option that allows your money to grow through the compounding of principle and tax-free interest. It can prove to be one of the best investment instruments for millennial as it gives the dual benefit of steady interest income and tax efficiency.
PPF investments make sense for young investors as you can get an interest income of 7.9% on your deposits. Moreover, PPF investments belong to the EEE category which means it is a superior option when compared to other tax savings instruments. The rate of interest on PPF is subjected to revision and the maximum deposit amount is capped at 1.5 lakh per annum.
Though you will not get immediate returns, you are likely to get an attractive corpus during maturity.
ELSS is one of the best investment schemes for millennial. Most of the working professionals opt for this scheme as it offers them an excellent avenue to earn exponential returns while getting tax benefits. Since ELSS investments can be done through the SIP option, it helps investors to contribute at regular intervals while following the disciplined investment approach. The ELSS investment come with a lock-in of 3 years, however, investors must remain invested for longer investment horizon to get attractive returns.
If you have a higher risk appetite and you can go for a longer investment horizon then ELSS can prove to be the best investment option for you. But before investing, make sure to gain some knowledge and understanding of the equities market else you might end up losing your money.
See Also: Best Investment Plans for 2019
National pension scheme, popularly known as NPS is a retirement investment scheme that was initially launched in January 2004 for government employees. Later it was opened for all categories of people as a social security initiative by the Central Government. It helps people from all sectors like employees from the public, private and even the unorganized sectors to save money regularly to create a pension fund.
NPS serves as an efficient retirement planning tool even for millennials. By subscribing to this scheme you can make contributions at regular intervals during the course of their employment. Post-retirement, you become eligible to get a percentage of the corpus. You will receive the remaining amount as a monthly pension post your retirement. NPS scheme holds immense value for anyone who works in the private sector and requires a regular pension after retirement.
If you are aiming to create a sizeable corpus, then you must consider investing in a mix of equity-related products and fixed income investment schemes. Market-linked products are crucial in helping your gain higher returns on investments whereas fixed income products shield you from market risk and allow you to grow your money slowly. Thus you can use the above-mentioned investment products to diversify your investment portfolio while maintaining tax-efficiency on your investments.
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