Investment Suit Your Life Goals

Does Your Investment Suit Your Life Goals?

A human life goes through various stages from cradle to old age. You go through jobs, marriage, raising kids and ultimately retirement. Investment becomes very important to fund the expenses at each stage. This is why you must focus on factors beyond returns while selecting investments. So, try to identify whether your investment suits your life goals.

Goals and risk appetite at each stage

When you are young, your investment goal can be about seeking ways to grow your money. You may need funds to buy a home or plan for your wedding. This is when you can opt for investments that may be slightly risky but have the potential to deliver high returns. That’s because age is on your side. You can always calibrate your investments as and when the need be. Therefore, an investment in mutual funds can be a good fit in this case.

However, you should avoid taking excessive risk if you are looking to build a corpus for your child’s education. Look for an investment option that can promise you stable returns in the long run. The large corpus at the end of the tenure would ensure your child avoids taking a loan to finance his higher education.

Similarly, look for a safe and stable investing instrument when planning for your retirement. Choose investments that can provide a regular income. This is important because you will not have a regular income in your retirement. The company fixed deposits (FD) issued by Bajaj Finance can be a viable option. The fixed deposit is rated stable by the rating agency CRISIL. So, your capital remains protected throughout the tenor. If you are a senior citizen, you can earn up to 8.1% annual interest. You can choose the payout on a monthly, quarterly or annual basis.

Installment v/s lump sum

If your goal is to build a large corpus, you can invest by saving a certain amount every month over a period of two or three years. Or, you can invest a lump sum in one go. It depends on the capital available to you. For example, you can invest a small amount every month in a mutual fund. Choose a Systematic Investment Plan (SIP). When you get a bonus, you can invest it in mutual funds too. Here, you have a lump sum to spare. Bajaj Finance offers several mutual fund schemes from different asset management companies. So, choose one as per your budget. 

Liquidity

Do you invest with the goal of creating liquid funds to meet emergencies? Always check whether your investments have a lock-in period or not. If they do, then you cannot use them during an emergency. However, there is an option. Check whether you can take a loan against your investment. This can make it liquid. For example, you cannot pre-close a Bajaj Finance FD within three months. You get the principal only when you pre-closet the fixed deposit between three and six months. Post three months, you can avail a loan against your fixed deposit. The highest amount is equal to 75% of the principal amount. The loan interest rate is 2% higher than the FD interest rates.

Partial withdrawal

Do you have the goal of meeting at different stages of your child’s life? Invest in a child plan with partial withdrawal option. This allows you to withdraw a percentage of investment corpus after a certain period. So, you have periodic inflow of funds.

Taxes

If your investment goal is to save taxes, then invest in tax-saving instruments. Do consider the tax implications when you invest. An FD has tax benefits if you are a housewife, senior citizen or under the age of 18. They can be exempted from paying taxes if their income is below the tax limit.

To sum up, when you invest, don’t look only at absolute returns. Instead, try to identify whether it fits into your life goals. Invest accordingly to reap the full benefits.

For More Info: Complete Investment Guide

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