In our previous blogs, we have discussed where to invest our money and short-term investing plans. However, people also earn good profits from short-term investing. But along with the short term, some money should also be invested in long-term investment plans. In simple language, understand it like this, Diversifying your investments is like having a balanced diet for your money. You wouldn’t eat only one type of food forever, right? Similarly, putting all your money in either short-term or long-term investments is like having an imbalanced financial diet. Let’s learn How to Invest Money In Long-Term Plans.
Picture this: Short-term investments are like snacks – quick, satisfying, and perfect for immediate cravings. They can bring in quick returns, just like how a snack can instantly curb your hunger. However, relying solely on snacks won’t keep you healthy, and depending only on short-term gains might not secure your financial future.
On the other hand, long-term investments are like a hearty, nutritious meal. They take time to cook but provide lasting sustenance. Putting money into long-term plans, such as stocks, bonds, or retirement funds, is like investing in your financial health for the long run.
Now, think of your savings as a basket of eggs. Placing all your eggs in the short-term basket is risky – one unexpected market dip and your eggs could crack. Similarly, stashing everything in the long-term basket might leave you hungry for immediate financial gains.
So, the golden rule is to create a diversified omelet! Allocate some eggs (savings) for short-term gains and some for the long haul. This way, you enjoy the best of both worlds – the quick wins and the steady growth. It’s like having your snack and a wholesome meal too!
Remember, a well-balanced investment strategy is a recipe for a financially healthy and satisfying future. Don’t put all your eggs in one basket; spread them wisely across short-term and long-term investments for a deliciously secure financial portfolio.
What does long term investment mean?
Long term investing is like planting a money tree which takes some time to grow but in the end it gives you a big, juicy fruit basket. Imagine you’re playing a long game, thinking about things a year or more from now.
So, why do people do it? Well, it’s like saving for something special. Maybe you’re saving cash for your child’s college fund or dreaming of a beach house for your retirement. These long-term plans are like the patient gardener who waits for flowers to bloom – they take time but are totally worth it.
Here’s the secret: The longer you leave your money in these investments, the more it can grow. It’s like a money-making friend who gets better with time. So, while short-term things are like a quick snack, long-term investments are like a slow-cooked stew that turns out to be a feast in the end.
Think of it as a financial marathon. You are not running fast; You’re pushing gradually yourself to a rewarding finish line. It’s the golden ticket to future dreams – whether it’s sending your kid to Howard or sipping coconut water on your retirement beach. It’s like giving your money the time it needs to transform into something wonderful.
Why is investment important?
Investing is like sowing the seeds for a prosperous future. Just like you plan for a rainy day, investing is like a safety net that catches you when life throws unexpected challenges. Here’s why it’s like a superhero cape for your financial well-being:
Financial Security:
Picture this – you and your partner navigating the complexities of life as a dynamic duo. With a guaranteed income savings plan, you’re not just saving money; You are building a fortress of financial security. If life decides to throw a curveball your way, this plan acts as a shield, ensuring that your loved ones are protected. It’s like a secret superhero power that doubles as a child insurance plan, securing the future of your nearest and dearest.
Tax Benefits:
Choosing a savings plan is like an assistant that helps you deal with taxes. It’s not just about saving money; It’s all about navigating the tax arena smartly. With a savings plan, you get to avail tax benefits, making your financial journey not only useful but also efficient. Think of it as a superpower that helps you keep more of your hard-earned money.
Happy Retirement:
Now, imagine your retirement as the grand finale, the victory stop, of your life’s journey. A savings plan is your magic wand to make your dream retirement a reality. Regardless of what your partner contributes, enabling yourself financially today ensures a peaceful and fulfilling tomorrow. It’s like investing in a treasure trove of memories, experiences and relaxation for your sunset years.
So, why invest? Because it’s not just about increasing wealth; It’s about creating a superhero story for your financial future. It’s about being a sidekick that fights financial villains, ensures a safety net for your loved ones, and lets you enjoy the sweet moments of retirement. In the grand story of life, your investment plan is the turning point in the plot that turns challenges into triumphs and ensures a happy life forever.
Long Term Investment Plans:
Mutual Funds
Investing in mutual funds is like sowing the seeds for a money tree which grows into wealth in the long term. This is a smart move as these funds are like financial superheroes, which are monitored by the government’s agency to keep your investments safe.
Types of Mutual Funds:
First, there are debt funds – the group’s stablecoins. These funds invest your money in safe things like corporate bonds and government securities. It is perfect if you are not interested in financial fluctuations and prefer a quiet ride with reasonable returns.
Next, equity mutual funds – risk takers. They enter the stock market aiming for that jackpot called capital appreciation. It’s a bit of a thrill ride with high risk, but if you are in it for the long term (for 5 years or more), this could be your preferred plan, especially with ELSS funds offering tax savings and short lock. -Only in a period of 3 years.
Then, we have hybrid funds – the all-in-one solution. These funds combine the safety of fixed income securities with the excitement of equity funds. If you are new to this money game, consider them your trusted partner – one that offers a balanced approach with minimal risk.
Now, here’s the magic trick – you don’t need a suitcase full of cash to attend a mutual fund party. With SIP (Systematic Investment Plan), you can start with as little as $500 (in India INR 500). It’s like setting up a financial piggy bank that grows over time, thanks to the magic of compounding.
Market Risk:
Sure, there’s a tag that says “market risk,” but here’s the secret: Stay invested for the long term — think 5, 10, or 15 years. It is like growing a money tree; It takes time, but the returns can be great. These returns are not just numbers; They are the keys to unlocking your financial dreams.
So, in the world of mutual funds, think of them as your financial Avengers – diverse, powerful and ready to help you achieve your wealth goals. Just stick with it long enough, and you may find a wealth of returns to satisfy your financial desires.
PPF and EPF Account
Like India’s financial superheroes – Public Provident Fund (PPF) and Employees’ Provident Fund (EPF). PPF is like a trusted friend, offering 8.7% interest rate and special tax benefits under Section 80C. It’s a good fit for you if you’re interested in low risk, long-term savings for retirement or big dreams.
Now, EPF, the work buddy of PPF, is your Employees Provident Fund. Contributing to both PPF and EPF are like tax-saving wizards, providing you benefits under Section 80C. You can invest a maximum of Rs 1.5 lakh to claim this tax benefit. Be free to invest more, but the tax benefits will not be reduced.
Here’s the good thing – interest on PPF is like a market dance, changing every year. PPF Superhero matures at 15 years, but here’s a nice twist – you can start withdrawals after six years. Keep it less than 50% of the balance at the end of the fourth year or the previous year, whichever is lower.
So, whether you are a low-risk ninja planning for the future or a risk taker balancing your financial portfolio, PPF and EPF have you covered. They are financial friends who help you save wisely, enjoy tax benefits and make your money work for you. It is like having your own team of financial assistants who ensure that your future is bright.
Long-Term Stock Investment
Imagine stocks as an exciting rollercoaster ride at a financial theme park. Now, here’s the problem – there is no guarantee that you will win a prize every time you jump. It’s a bit like a game; Sometimes you win big, sometimes not so much.
Now, why would you want to play this game? Well, stocks are like the rockstars of your investment portfolio. You decide how much of your money you want to lose. It’s all about risk – how financially adventurous are you?
So, let’s break it down. You can make stocks a part of your money squad, but be smart about it. Don’t put all your ice cream cones in one basket. Allocate the percentage based on how comfortable you are with risk. If you’re someone who loves relaxing at the beach, maybe a small percentage. If you’re into skydiving, maybe a little more.
Here’s the deal – stocks are like that good friend who brings excitement to the party but also a little unpredictability. There are no guarantees of returns, but if you play your cards right and keep an eye on your risk appetite, it could be the key to unlocking some financial adventures.
Therefore, treat stocks as a wild card in your financial deck. A little unexpected, yes, but also the potential for some serious thrills. Just make sure it fits your risk style, and who knows, you might get a front-row seat to some impressive financial fireworks.
Real Estate
Picture real estate as the superhero of investment – from comfortable homes to bustling hotels and busy malls, it is booming everywhere. The best part? It’s not just about houses; It is VIP in areas like hotels, offices, shops and even factories. If you’ve found treasure from previous smart moves, diving into real estate is like joining the cool kids club.
Think about it – real estate isn’t just a house thing; This is the talk of the whole city. If you’ve got some cash from past winnings, consider it like a golden ticket to investing in this bustling world. From comfortable homes to spacious offices, real estate is a land of opportunities. So, if you’re ready for the big leagues and want your money to mingle with the stars, real estate could be the financial red carpet for you.
ULIP
Think of Unit Linked Insurance Plans (ULIPs) as a chameleon – they are like a combination of superhero powers, mixing it up in the worlds of debt and equity. You can keep track of their exploits through something called Net Asset Value (NAV), which is a kind of financial mood ring that shows ups and downs.
Now, the thing is – ULIPs often get mixed reviews because of some of the charges, but they have the secret talent of giving you good returns of 8% on long term dates with your money. They are like investment adventurers, ideal for those who are not afraid of a little financial ups and downs.
ULIPs are like a bundle of options, giving you exposure to equity and debt markets. This means you can choose the recipe that best suits your tastes, i.e. your risk style and financial goals.
The real kicker? tax benefits! ULIP gives you a ticket to the tax-saving party under Section 80C. You can claim a deduction of up to Rs 1.5 lakh – not too much. And here’s the final twist – when it’s time to withdraw the cash, the redemption proceeds are tax-free under Section 10(d). ULIPs are like the tax-saving wizards in the investment kingdom.
Therefore, in the field of long-term investing, ULIPs are a versatile tool. They’re ready for anything – from retirement planning to financing your child’s dream college adventure. If you are looking for an investment partner with multiple possibilities, ULIP can be the financial superhero for you.
Fixed deposit:
Okay, let’s talk about the OG of Indian investing – fixed deposits (FDs). It’s like the classic black dress of the financial world, suitable for any occasion – whether you’re wearing it for a long trip or just a quick trip.
So, here’s the deal – with FD, you get to choose your own time travel adventure, whether it’s a 10-year marathon or a short sprint. Need some cash urgently? No worries. FDs are great services that let you quietly make an early exit or grab a portion of your money when the money alarm goes off.
Now, the magic touch – ICICI Bank brings to you the wisdom of opening FD online. Yes, you heard right – no hat or magic wand needed. Just go to the iMobile Pay app or Internet Banking and voila! Your FD journey begins without leaving your comfortable sofa.
In short, FDs are eternal classics, your financial best companions for the short and long term. They’re like superheroes who give you flexibility, a little spark in the form of interest, and the power to take control of your financial destiny. So, if you are into simplicity and reliability, FD can become a financial fashion statement for you.
Sukanya Samriddhi Yojana:
Meet Sukanya Samriddhi Yojana (SSY) – your little superhero, the Indian Government’s special savings for girls. It’s like a magic box where you can deposit money for their future adventures.
Now, any person in our country can earn just Rs. You can start this savings journey from Rs. 250, and if you’re feeling extra generous, Rs. get to the. 15,000 in a year. This is like sowing the seeds of financial goodness for your girl.
Here’s the twist – SSY has a secret handshake with time, a lock-in period of 21 years. This means you’re playing the long game, and guess what? Your money earns a good interest of 7.6% per year. It’s like giving your future financial superhero a head start.
In short, SSY is the government’s gift to nurture your financial garden for the little surprises in your life. Start small, dream big, and let the power of time and interest create a big treasure for your girl’s journey ahead. It’s like building a dream palace one rupee at a time.
Government Long Term Bonds/Gold Bonds.
OK, let’s dive into the world of government long-term bonds – it’s like that superhero hat the government wears when it needs cash for big things like building bridges or financing top-secret projects. These bonds are like IOUs from the government, which promises to repay you with some extra money for your trust.
Now, the good thing is that these bonds have fixed interest rates and a time frame, like a money adventure that lasts from a few months to several years. When this adventure ends (we call it maturity), the government returns the principal amount with a little bonus, known as interest.
Why are these bonds such a big deal? Well, it’s like having a financial bodyguard. The government doesn’t mess around when it comes to repaying the loan, making these bonds a safe bet – much safer than your cousin forgetting to return your bike.
Now, buckle up for the types – fixed rate bonds are like steady eddies, while sovereign gold bonds add a touch of sparkle to your portfolio. Inflation-indexed bonds are helpful in keeping pace with time, and PSU bonds are like supporting characters of government-backed companies. And here’s a
secret – some of these bonds are like rockstars, traded on stock exchanges, which means you can buy and sell them like a pro.
In short, government long-term bonds are reliable allies in your investment journey. They are safe, bring guaranteed returns, and are the best option compared to traditional fixed deposits. It’s like owning a piece of the government’s treasury, making your money feel like it’s on a grand adventure.
National Pension Scheme (NPS)
The National Pension Scheme (NPS) is like a financial friend of the Government of India, offering a ticket to think about the wonderful things of the market – debt and equity. It’s not just an investment; It is a long-term savings superhero that also gives you tax exemption under Section 80C. If your age is between 18 to 60, you are in the NPS team.
Now, why choose NPS? It is like the wise owl in the investment forest – safer than some of its riskier equity friends and shows higher returns than traditional PPF. Hunt? It’s like a birthday present from the government that opens when you score a big 6-0. This is the golden ticket to a stress-free retirement, but keep in mind, the final pension party depends on how well your investments perform.
In short, NPS is the government’s way of helping you paint a bright and worry-free picture for your golden years. It is a long-term savings plan with tax benefits, a little security and the magic of the market. So, if you are eyeing a comfortable retirement, NPS can be a financial help for you.
Benefits of long-term investing
- Power of combination
- Protection from short-term volatility
- Goal-oriented planning
- Facility
- tax benefits
- Less impact of market fluctuations
- More time to try different funds for maximum returns
In a nutshell, embarking on a journey of long-term wealth creation is like planning an exciting trip. Before stepping into the realm of investment plans, consider a financial expert as your trusted sailor, guiding your financial ship with expertise. Taking his advice is like having an experienced captain steering your path. Equip yourself with knowledge – The Internet serves as your repository of information. Dive deeper into market data, explore historical returns. Before working your financial magic, consult financial magicians and do your homework diligently. Picture it as weaving your own financial fairy tale, where informed decisions act as the key that opens the treasure trove containing your outlined goals.