How to get rich fast: Do this to spend a lot but not regret every month-end
How to get rich fast: Do this to spend a lot but not regret every month-end A good life is all about balance. How you manage your expenses and savings decide how content you can be with yourself at the end of every month, or in case of any emergency.
How to get rich fast: A good life is all about balance. How you manage your expenses and savings decide how content you can be with yourself at the end of every month, or in case of any emergency. Youngsters joining the workforce after college, often, complain of being left with no money towards the end of every salary month. This happens as they fail to maintain a balance between spending and the need to save. It is important to save, even if it is a small amount, to become financially responsible and independent. There are many reliable ways in which you can let a part of your earnings grow every month. But then, you need to start as early as possible.
Here are six options in which you can invest a part of your earnings and see them grow, while you still continue to enjoy spending on things you love:
Bank Fixed Deposit (FD)
This is one of the safest and popular options for savings and investment. In the wake of recent FD rate hikes by several leading banks, this is probably the best time to invest in FDs. Not only this, banks also offer a tax-saving FD that you can use to grow your money as well as save tax.
Government bonds like National Saving Certificates, or NHAI bonds, are one of the safest, secure and reliable choices for savings and investment. These come with fewer risks than stocks and allows you to earn at a fixed rate of interest with a lump sum amount payable at maturity.
You can invest as much as you wish in bonds. There is no maximum investment limit but the income earned is taxable as per the Income Tax Act 1960.
Company Fixed Deposits
RBI authorised Company FDs offer higher interest rates than regular FDs. There is a fixed rate of return on Company FDs but you need to be careful to make an investment that doesn't expose your funds to direct market risks unless you are up for it. Also pick investment period wisely as the term for the Company FDs are fixed - 12 months to five years.
Mutual Fund investment
SEBI says, "Mutual fund is a mechanism for pooling money by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document." It is less risky as SEBI says, "Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is diversified because all stocks may not move in the same direction in the same proportion at the same time."
Through a systematic investment plan (SIP), you can start investing an amount as small as Rs 500 every month. You can start investing a portion of your salary now. However, before investing, read all scheme related documents carefully.
Unit Linked Insurance Plans (ULIP)
These offer you the double benefit of equity/debt investment and life insurance. Death benefit under ULIP is completely tax-free. They come with the benefit of insurance income protection in case of death of the insured. The final payment is also exempted from tax under Section 10 (D) of the IT Act. The premium paid on ULIPs is also eligible for tax deduction under Section 80 C of IT Act.
In uncertain and stressful times of today, health insurance policy is a must-have. Experts say health insurance should be seen as an investment to protect your health and wealth.
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