The Importance of Investment Plans
by
Sudeep Desai
Ever since Rohan started his career post graduation, he was advised about one thing by his father. That was to save as much money as possible and invest it carefully. Initially, Rohan thought that it was in the nature of all parents to advise their kids and did not take it seriously. But as he grew older, he realized the importance of investments. He was now married and his wife was soon expecting a kid. With no major investments and assets as yet, he was beginning to feel the financial pressure. With inflation on the rise, it is not only Rohan who is feeling the heat. Each one of us is troubled with the thought of future financial security. So what needs to be done to combat this situation?
The solution lies in charting out an appropriate
investment plan
. It may sound like a mammoth effort but it is actually very simple. All you need to do is put down on pen and paper, what is your income, average expenses, savings and disposable income that can be invested. If it becomes too difficult for you to do this, then you can take the expert advice of a financial planner. His understanding and insights in the area of financial planning can certainly help you create a successful investment plan.
A perfect plan should ideally consist of a long term investment plan as well as a short term investment plan.In case of the latter, the plan should be able to provide good returns in the immediate future. Some of the best short term investment options are investments in liquid funds, debt instruments, fixed maturity plans, derivatives market; etc. You must decide on how much you would want to invest in these asset classes based on the liquidity you would require in the immediate future.
A very common trend observed among people is that while they do plan for the short term, they ignore long term financial planning. A
long terminvestment plan
should be a defined plan taking into consideration various future needs like housing, children s education, medical expenses of self and dependents; etc. Itsstrategy should ideally be investments in real estate, public provident fund (PPF), mutual funds, etc. Investment in life insurance policies is a must as it will provide a life cover and endowment policies will also provide you with good returns in the future.
Hence, short term investment plans are better for people who surely know that they would require their capital back, in a certain time frame. Whereas, long term investment plans perfectly suit the needs of those individuals who look forward to building a corpus for themselves, over a period of time. Hence, to avoid a situation like Rohan s in your life, have your financial planning in place, today!
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Article Source:
ArticleRich.com