Very Long-Term Funds: The product under this category are:
Sukanya Samriddhi Scheme: Sukanya Samriddhi Account is a Government of India backed saving scheme targeted at the parents of girl children. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child.
Pension Scheme: Pension Plans provide you with financial security when you retire so that when your salary stops , you can still live with pride without compromising on your living standards. Given the high cost of std of living and rising inflation, pension planning has become all the more important so that when you retire you are not dependent on any one and you achieve true Financial Freedom.
Public Provident Fund (PPF): The PPF account or Public Provident Fund scheme is one of the most popular long-term saving-cum-investment products, mainly due to its combination of safety, returns and tax savings. The PPF was first offered to the public in the year 1968 Since then it has emerged as a powerful tool to create long-term wealth for investors. – its not always about tax planning , tax saving or tax exemption but along with tax free returns if you also get compounding and growth – nothing can beat that – remember the returns are around 8 % but completely safe.
Equity Linked Saving Scheme (ELSS): Equity Lnked Savings Scheme, popularly known as ELSS are close-ended, locked in for 3 years diversified equity scheme offered by mutual fund. They offer tax benefits under the Section 80C of Income Tax Act 1961. ELSS can be invested using both methods – SIP and lump Sum. My advice is ELSS being Equity product – should be considered as wealth creation for long term as well and investors must continue investing in the same even after 3 years, if they are not in need of that money
Large Cap Equity Mutual Fund: This scheme invests into those companies which typically have strong corporate practices , whose Market capitalisation is high and have been in the market for a long time, and hence some of the best performing large cap mutual funds, have generated steady returns for its investors. The returns are usually moderate, but steady.
Multi Cap Equity Mutual Fund: Multi Cap Funds are diversified mutual funds which can invest in stocks across market capitalization. Since this fund invests in all the caps – Large, Mid & Small; its beautifully diversified and hence are relatively less risky compared to a pure mid cap or a small cap fund and are suitable for not-so-aggressive investors.
Real Estate: Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. it is also capital intensive is highly cash flow dependent. If these factors are not well understood and managed by the investor, real estate becomes a risky investment. The investment in the long run can give a higher value on the purchase or rental income for a longer period. ,
Remember there is a high Liquidity risk in this product asset class and also not so transparent….One must consult Real estate expert before investing in 2nd Home or 2nd Office , shop etc as the House you are staying in and the office or shop you are operating from is not the part of your Investments. Also do proper Math what kind of % returns you are generating as Rental Income on total Investments as we always talk amount when we speak about returns on Real Estate unlike other product asset class – we talk % –
Lastly, Never ever compromise your SIPs because of the EMIs in building Real Estate asset – Think twice before investing in Real Estate without any emotions – There is no place for emotions when you are trying to achieve your dreams and goals and never tilt too much towards any one asset class how much ever you are bullish about that.
I am happy as I am able to involve maximum products details so that you can understand the crux of Goal Based Financial Planning and also invest properly.
Let us diverse our attention on a different concept of mutual fund.
Different Combos to Different Tastes
What are the different Types of Systematic Transaction in Mutual Fund:
SIP: Systematic Investment Plan, commonly referred to as an SIP, allows you to invest regularly a fixed sum in your favorite mutual fund scheme/s. In SIP, a fixed amount is deducted from your savings account every month and directed towards the mutual fund you choose to invest in. If today you don’t have 1 core today but you aspire to have it after 10 years – SIP is the way in accumulating your aspiration with a smaller investment every month you do from today so that with compounding and discipline you achieve that – Drop by drop you can create Ocean – that’s SIP.
STP: Systematic Transfer Plan. STP is an automated way of moving (transferring) money from one mutual fund to another. This plan is chosen when one wants to invest a lump sum amount but wants to avoid the marketing-timing risk. The most common way of doing STP is to transfer money from a debt fund to an equity fund. This helps when you are confused how to go about investing in equity market as one can never time the market . You invest a lumpsum amount in a Liquid or Debt scheme and transfer small amount or % into equity , say on monthly basis. You enjoy the protection of the capital and also the average returns from the equity market….
SWP: Systematic Withdrawal Plan is the facility by which an investor can withdraw a pre-determined amount from his existing investments in mutual funds at a pre-decided interval (weekly, monthly, quarterly, semi-annually or annually). Functionally, Systematic Withdrawal Plan (SWP) is similar to Systematic Investment Plan (SIP) but it gives an option to withdraw systematically. This helps in generating a regular cash flow for the investors. SWP in mutual fund is one of the most effective and tax efficient way to earn potential returns particularly in Retirement Planning it works wonderfully well as Pension
Bandhan SIP allows you to give SWP option to selective 3rd party also.