Your Future Is Defined by Your Investments, Not Salary


~ While the present reality confronts you in the face, the future is what calls upon you! ~

You go to work every day and earn yourself the satisfaction that a sum of money will get credited to your account at the end of the month. And before you know, that credited money that you call ‘salary’ soon gets used up in meeting your day-to-day expenditures.

You spend a major part of your salary in paying off the bills, children’s school fees, buying groceries, and the list goes on! With consumption expenditures eating away your salaried income, you’re only able to save little money.

However, you have life goals that make you look forward to the future. These may include starting your venture, taking your family for an international trip, financing your kid’s education abroad, and many more.

So, do you think that with your salary and little savings alone, you’ll be able to realize your dreams and future goals alike?

Honestly, we doubt!

But that’s where ‘investments’ come to your rescue!

When you invest money, you create more wealth for yourself in the future. This accumulated wealth can then help you meet all expenditures associated with your life goals.

So, in an ideal situation, every one of you should parallelly take care of both your present and future by earning, saving, and investing simultaneously. While you may be doing the first two, let’s explain to you more about investing.

What Exactly Does the Word ‘Investment’ Mean?

The word investment means that you commit a portion of your money in an instrument which promises a future benefit. However, this sum of money is different from saving as there is both risk and profit involved in it.

The purpose of savings is basically to either cover you for a rainy day (sudden emergencies)  or to help you meet certain specific expenditures. However, investments by paying you profit, help you create more wealth than you commit, which in turn enables you to achieve your life goals easily.

Different Types of Investment Instruments

There are many investment instruments available in the market today. This presents you with the choice to put your money in different baskets. However, due to inflation, which is like a wealth eating monster, it is essential to choose the right investment instrument. 

The investment instruments can be mainly categorized into equity investments and debt investments.

  1. Equity Investments– Under this option, you buy shares in the ownership of a company and then become entitled to the profits and losses. You receive this amount in the form of a dividend. The returns in this investment vary each time and are more subject to the risk of fluctuations.
  • Debt investments– In this option, you lend money to an institution or the government in which you receive fixed interests.

Besides dividend or interest, you can also earn capital gains on sale of such instruments. Due to fluctuations in the market price, there can be a difference in the purchase price and sale price of the instrument.

Indirect Investment Instruments  

This refers to those instruments which are managed by fund houses or insurers who invest in a variety of stocks or bonds or both on your behalf.

  1. Mutual Funds: This is formed when funds are collected from different investors andthen invested in a company’s bonds or shares. Several investors collectively own this type of fund which is managed by a professional fund manager.

Mutual funds offer diversified investment as you can invest in a pure debt fund, equity fund, or a hybrid fund.

  • Unit Linked Investment Plan (ULIP): ULIPs are another excellent instrument for investing. These refer to insurance plans that offer the additional option of investing your money in various assets. This, again, is a professionally managed portfolio, the ownership of which can also help you enjoy tax benefits under Section 80C.

Under this, you can invest in diverse kind of funds – equity, debt, and balanced. Moreover, this plan not only insures your family but also helps you achieve several financial goals quite easily. Furthermore, there are reputed insurers like Max Life insurance that offer reliable ULIP plans coupled with the following benefits:

  • Multiple fund options
  • 12 free switches per year
  • Tax benefits under Section 80C and Section 10 (10D)
  • Partial withdrawal facility
  • Guaranteed loyalty additions (starting from 11th policy year)
  • Public Provident Fund (PPF): This is a government offered saving scheme that allows you to invest your money for a fixed period and earn returns on their savings. This is a safe and accessible investment option and offers 8% interest rate (from 1st October 2018). If you have a girl child, you can even invest in a Sukanya Samriddhi Scheme.    

Start Small, Start Early

Investments are subject to compounding, so the earlier you start, the more wealth you can accumulate. If you invest with discipline and give your finances enough time to grow, you’ll be able to multiply your money big time.

Moreover, to invest, you don’t need a big sum of money. Just start small and gain big.

In such a case, when you have limited funds, ULIP would be a good option for you. ULIPs will offer you the right combination of insurance and investment and will also help you save tax.  And as mentioned before, reputable insurers like Max Life Insurance offer ULIP plans that provide a simplistic approach to invest in the market with multiple fund options. So, if you seek protection and wealth creation both, then go for ULIPs.

So, invest smartly and realize all your life goals and plans!