Everyone wants to be rich. To grow rich you need to be different from the crowd. There is a famous saying, " To get something you have never got, you must do something, you have never done."
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The Public Provident Fund (PPF), is a favorite among many investors, as it is backed by the Government of India and offers attractive interest. It is the best method of saving money for retirement.
The minimum amount to keep an account active is Rs 500 a year and the maximum amount that can be deposited in a financial year is Rs 1,50,000. PPF has a lock-in period of 15 years and it can be further extended to 5 years.
PPF offers you the EEE benefit. The money invested in PPF will be tax exempt up to Rs 1.5 Lakhs under Section 80C of the Income Tax Act. The money accumulated and withdrawn at maturity, are also tax-free.
You must start investing in PPF in your 20s to enjoy a good retirement.
Mutual Fund SIPs (Systematic Investment Plans) are the best investment option for those who do not have much knowledge and time to research the stock market. SIP gives you the option to invest small amounts of money every month, to build a large corpus over a long period of time.
SIP helps you to enjoy rupee cost averaging, which means you can buy more units when markets are down and less units when the market goes up for the same amount.
You can start investing in SIPs with a minimum amount of Rs 500 a month. SIP helps you to invest in a disciplined manner as money will be automatically deducted from your bank account.
Investing in mutual funds at a young age will help you create more wealth over a long period of time.
To meet short-term financial emergencies, many people depend on money saved in a savings bank account. But, instead of saving money in a savings bank account and earning just 4% interest a year, you can invest in liquid or short-term debt funds to meet financial emergencies.
You can even invest in flexi-deposit accounts. It allows you to earn higher interest and withdraw money as per your convenience. You should always save and invest money to meet financial emergencies.
When you are in your 20s, you often ignore health insurance plans, thinking that you are still young and nothing can happen to you. Some people just rely on the health insurance provided by employers. This is not a good idea. Health insurance provided by employers are not suitable for individual medical needs and also you won't be given a large sum assured under the plan.
You will be left uninsured, if you lose or change your job. So, make sure you are not underinsured by availing an individual health insurance plan along with the insurance provided by your employer.
The main advantage of availing health insurance when you are young is it will cost you less and the waiting period will pass quickly. Be Wise, Get Rich.
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