ABC of Investment

One very popular blunder committed by common investors in India is - wasting their hard-earned money in insurance in the name of investment. This is due to our ignorance about insurance as well as investment . We should be well aware of the following basic things........ Insurance and investment are separate instruments required for separate purposes. We should never mix insurance with investment or vice versa. If you want to get insured, then go for Term-Insurance . If you want to invest your money, then go for different investment vehicle available in market like Fixed Deposit, Term Deposit, Recurring Deposit, Public Providend Fund, Stock Market, Bond, Mutual Fund....... etc.......as per your investment goal. If you invest your hard-earned money in " Endowment Insurance Plan" or " Unit Linked Insurance Plan" , you are actually mixing insurance with investment. You will realise your blunder after 20-25 years during maturity of these pl

ELSS: Equity Linked Savings Scheme This type of investment is basically a mutual fund in the category of 'Equity: Tax Planning'. Money in this type of Mutual Fund is invested in equity / stock market. Money is generally invested in reputed companies. The risk factor is average in this type of Mutual Fund.  Return on investment may be better than any other Tax-Plan available in market. Investment is locked for three years. Investment amount is eligible for deduction under section 80C of income tax with upper limit of 1.5 lakh. This plan is the best plan for Tax Planning as well as wealth creation in India. Profit gained after three years of investment is termed as' Long Term Capital Gain'. This long term capital gain is exempted from paying income tax upto gain of 1 lakh. Now, there are numbers of Mutual fund schemes from different mutual fund houses. We will discuss few good funds as examples of 'Equity: Tax Planning