5 Things to know About ELSS Funds

ELSS Funds

Equity Linked Saving Schemes (ELSS) is an equity-oriented investment option mainly focused on equity funds and other equity-related instruments. It has a lock-in period of 3 years. Any investment made in ELSS funds is eligible for deduction in 80C which makes it very popular. We would be talking about five things you should know about ELSS funds before investment.

ELSS Has a Lock-in Period of 3 Years

The ELSS funds have a lock-in period of 3 years. It means the investors would not be able to withdraw funds/ redeem their unit before three years. Please note that ELSS funds probably have the lowest lock-in among all tax-saving instruments. Also, ELSS is an open-ended instrument so, after the stated lock-in, you can hold it for as long as you want.

ELSS Should Be Held For a Long Term

As told previously, eligible ELSS funds are required to have a lock-in period of three years. However, it is suggestible to consider ELSS funds as a long-term investment option such as 5 to 7 years, if such fund had been performing well. The reason is that equity-based funds give better returns in the long term. So, to gain higher-returns one should see these funds as a long-term trading

ELSS Has Tax Benefits

ELSS scheme is one of the popular investment options in the markets. It provides tax savings while at the same time, provides good returns on investment. While investing in ELSS for saving tax, one must know that such tax deduction is allowed under section 80C of the Income Tax Act. It is necessary to understand that Section 80C is like an umbrella, with many eligible deductions like medical insurance, child tuition fees, etc. An investor can claim deduction up to Rs. 150,000 under this section. So, if a person is investing in ELSS only to save tax, he/she must take in note the other options too and calculate the amount of investment needed. However, if the investment is being made only with the sole purpose of earning one can invest as much as she/he wants with an eligible tax deduction up to Rs 150,000.

One Can Invest in ELSS Whenever She/He Wants

ELSS funds are suited to all kinds of investors who are willing to take moderate risks. It not only helps you to accumulate wealth in the long term but also provides additional tax benefits. It is like hitting two birds with one stone. Apart from the above, it helps you to diversify your portfolio by investing in various sectors. The short lock-in period is also a blessing for investors looking for a way of saving tax.

ELSS Funds Help You to Diversify Your Portfolio

Investors looking for a venue for investing in ELSS reap the benefit of diversification by distributed investment across different sectors and corporates, reducing the overall risks in investment. ELSS funds are said to carry moderate risks. Experts suggest investing across various schemes and holding your units for the long run. It helps to neutralize the overall risk of investment.

We hope this article has helped you to know more about Equity Linked Saving Schemes (ELSS). If you have any doubts or query about ELSS funds, do let us know. We’re happy to help.

5 Tips to a Successful Investment Journey

Investment Journey Tips

A journey is confusing without a map the same way the journey of the financial world is impossible without a pre-planned chart or strategies. You cannot start investing without a plan. You will probably waste your money anywhere or everywhere. You have to look up according to your convenience and resources. Financial planning never comes easy, without the chain of steps. These steps guide you based on your money and outflow. Here, we will introduce five tips for a successful investment. It’s a long way to go through the small steps that we take.

Start Investment
In today’s time, the process of growing your wealth must comprise investment. Focus more on investing the right way and right proportion. It needs a lot of hardship in the financial world to grow as an investor. Identify your goals, define your investment approach and then play your process of investment accordingly.

Acquire Knowledge of the Market
Grow your interest by investing in the stock market and making informed investments. Read books or take courses on investments dealing with modern financial strategies. There is much worth reading text like stock for the long run by Jeremy Siegel, that will explain to you about the high levels of finance. Investing consists of science as well as art. It has principles and also quality. It’s required to learn about every aspect of investment. Grow up your market knowledge. Once you know what works in the market and what does not work, you can formulate simple rules regarding your investments.

Define of your investment strategy
Nobody knows your financial condition better than you. You should go according to the plan so that you can get the best out of your investment. You can consider consulting a financial advisor who can give you the best possible measure by which you can get more returns on your investment and can help you in planning for future investment. He will help you select out the best investment alternative according to your financial goals and risk appetite.

Right investment guide
Your level of resources will define your path of investment. Always differentiate in the options you have. Don’t rush in one way. Be careful about what you invest and where you invest. Start with low risk and learn gradually. Adopt long term investment for an optimistic future. Always try to take help from the financial advisor regarding investment because he is the only person who will guide you in the best possible way in regards to your investments.

Long term investments
Sticking with a long-term investment strategy may give you benefits for future decisions. Owning assets is one of the most beneficial steps in growing up your financial status. Your chances of success will increase if you stay in the course without letting your emotions take charge of your practical life.

Learning to be a successful investor is a gradual process. The market will prove you wrong sometimes. Believe in your strategies and be on the runway for the long term. In the end, a conclusion comes to like to explore various types of investment alternatives. Risk is an inseparable part of the financial world. Set your bar from low-risk investments to high-risk investments. You can’t expect miracles without putting in efforts. The result of your investment will be the reflection of your effort and hard work. Invest smart, not high if you invest a small investment in the right way.

Best 6 Steps to Financial Planning for Women

Financial Planning for Women

In today’s time, it is easy to talk about female freedom, male-female equality, and women empowerment. We all hope for change in society through well-established policies. But can there be freedom without financial independence? These are some of the steps that every woman should follow to ensure long term financial independence. The American association of university women estimated the 2018 “gender wage gap” to be at 18%- on average most women earn 82% only for every dollar earned by a man.

Plan a budget

Well, a budget is an estimation of your income and expenses. Create a monthly expense list containing bills, fees, rent, groceries, and others. Women empowerment has come a long way a lot to develop regarding finances. That development will start from your small initiatives in which budget formation is the initial step.

Be obsessed with your investment 

Investments are beneficial over short as well as long term returns. Every woman should keep herself first and should think about her financial security. Start investing early in mutual funds. You can start as low as INR 500 per month. This amount will be useful in the future. You plan to buy a house, or to travel, your child’s education or marriage. Investing in gold is also beneficial and proves to be a smart move. 

Manage your finances 

If you are a single woman, there are chances that you have already taken responsibility for your finances. If you are married, you should prepare to take responsibility for your money flow rather than depending upon your husband or in-laws. Be financially independent on your terms. Your financial ability will help you to achieve your dreams.

Be debt free

Even people with high paying jobs cannot support themselves financially. It is because, from head to toe, they are under the debts.  The main reason is unequal pay. Many women take loans and spend more than they can afford. Everyone wants to live a luxurious and healthy life when they can’t afford their desires often lead to debts. Limit your spending habits will help a lot.

Earn, save and invest 

Even after having a good income one should need to focus on wealth and try to earn more and more wealth so that it becomes easy to fulfil all the demands of you and the members of your family. On the other hand, you need to save at least some part of your income for further expenses. If you invest in some long-term or short-term securities, you can earn a good profit that can be a part of your income that could be useful for future purposes.

Hiring a financial planner

It is necessary to have a financial plan so that your investments can meet your goals. A financial planner can set up a plan based on your money flow. It is suggestible that people should control their expenses efficiently to meet their financial objectives. In the end, we can say that every woman must be financially independent that will help her in chasing her dreams and making her satisfied. 

How to Retire Early?

How to Retire Early

It’s a common perception that retiring late will provide you more money for a secured future. However, it does not work like this. Retirement planning is not about working more but more about starting early. Retirement plans are formulated beforehand. Whether you retire early or late, each has its own benefits according to your plans before and after retirement.

The word ‘retirement’ makes you think of a retirement at an old age, probably 60 or more. Turning old often brings a comparatively less-energetic body and makes one vulnerable to various health issues. Such conditions force one to spend majorly into medical services. So, it’s better to plan retirement at an early age. To retire early, you have to make pre-plans regarding your savings and expenditure. If you are planning an early retirement, it’s best to start saving your money from the time of your working days.

It is advisable to keep a separate saving for your expenses. Children’s education, marriage all can be handled by the debt securities that you will own. Debt mutual funds are considered the most beneficial step regarding the investment of your money. You can monthly invest some amount of money in deposits and at the right time, you can get a lump-sum of amount from these debt instruments.

Education nowadays is the most important key for self-independency, respect in society, and a standard lifestyle. You cannot compromise on the education of your child and will have to save separately for this. The higher education of your children requires a huge amount of corpus and many middle-class families are not able to cope up with such high fees. Many education plans are being grown-up for student’s bright future, be interested in such plans, and invest here.

You have to see your retirement with optimism. Securing your present, while covering your future needs requires detailed plans and proper investments. It is advisable to have a balanced mutual fund portfolio which invests in the long term as well as short term investments. Long-term investments will meet your future needs on the other hand short-term investments will help in current present expenditures. Apart from the above-mentioned expenses there are some other household expenses which seem to be small but are fixed in nature. After investing in these investments, the left-over amount can be useful in small fixed-unfixed expenses. 

Following these steps will surely be helpful in your early retirement planning. After meeting all necessities, just save a small part of your salary for your requirements. Retiring at an early age will enable you to explore the world and to focus on yourself. But this could only be done when you are relieved from the tension of all the responsibilities. 

Making a systematic rule for every step will not only help you but also your family. Education, marriage, retirement all will be planned so you can spend the most time with your family and do whatever you want. A middle-class working person lives for his/her family and responsibilities but she/he deserves the time to live for herself/himself too. You can travel and explore after working for years, your financial plans can give you a good vacation and trips with your family. Don’t consider early retirement a bad sign. If your plans are well-structured and takes care of every nook & cranny of your financial needs, you will not face financial problems and will always be economically stable. You can start to save some money from your early days for your travel after retirement. Don’t make retirement a full stop on your enthusiasm, make it a new beginning. Life is never so short to explore and to live a life, full of life!

What are the 3 Main Types of Mutual Funds?

Mutual Fund Types

Mutual funds are one of the most sought-after investment options in the financial markets. They are generally categorized into 3 basic types, i.e. equity funds, debt funds, hybrid funds. Such distinction is made based on their characteristics- liquidity, assets invested in, nature of securities owned, associated risks, etc.

While equity mutual funds are similar to equity stocks, fixed income mutual funds concentrate on corporate bonds and other securities that earn a regular income, and money market mutual funds deal in securities with high liquidity. Each has its different returns, associated risks, and separate lock-in period. We have tried to explain them in the following points for your better clarity:

1. Equity Funds

As the name suggests, these funds deal with the investment in funds of publicly traded equity shares. They are also credited with generating better returns than term deposits or debt-based funds. However, owing to the high volatility of the capital market, such funds often have higher associated risks than the other two options. Such funds participate in various equity shares of corporates operating in different sectors to minimize the underlying risks. There are various sub-categories of equity funds, some of the popular ones are- growth funds, income funds, and index funds. Each has its investment objectives and characteristics.

2. Debt Funds

The objective of debt funds is to earn a safe and fixed amount of returns on their investments. They invest significantly in fixed-income securities like corporate bonds, government securities, and debentures, etc. These securities invest in secured debt funds which provide a steady fixed income to its investors. By investing in relatively safe avenues, the investor can lower the risk factor in investment. The reward on such securities is pre-stated and fixed. Generally, the return received on such secured funds is often lower than returns received on equity stocks but so is the risk. They are often suitable for people who have a low-risk appetite and want to earn a steady income.

3. Hybrid Funds

Hybrid means ‘anything made by combining two different elements’. Such hybrid mutual funds are a mixture of equity and fixed income mutual funds. These mutual funds create a mixed balance between the number of equity and mutual funds. This not only creates a balanced risk exposure according to the set financial objectives but also provide lucrative returns on the investment. These funds are often tailored according to the pre-determined needs of the investors so that they can reach their individual financial goals.

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