The financial year of 07-08 is coming to a close, so if you don’t already have your taxes in order, there’s no better time than to start now. Here’s the where, what and how of things you can quickly invest in save on tax this year.
Life Insurance Premiums Your insurance agent should be able to help you out with this.
Bank Term Deposits You can get these from any scheduled bank in your area.
Public Provident Funds (PPF) You can open your PPF account in any of the following: - A branch of SBI or in any of its associates (except offices managed by a single officer/clerk) or any nationalized bank - A Head Post Office or grade sub-post office
Savings Certificates notified by the Government (NSCs) Head to your local post office for this.
Mutual Funds (ELSS) There are tons of players in the market for Mutual Funds. Pick up the latest copy for the Financial Times or call your agent.
Pension Funds Like Mutual Funds, there are several pension funds on offer today. Call your agent for one that suits you.
Tuition Fees Receipts of tuition fees for up to 2 kids at recognized universities and institutions are positive benefits for expenses made during the year.
So, what's your choice of investment? Don’t miss the bus and pick one right away.
Today getting the right kind of financial advice is critical. While planning financially, most people depend on someone who’s called a ‘financial planner’. Once you have chosen your financial planner, this person becomes an important part of your life, helping you through various investments, insurance, taxes benefits, basically guiding you in achieving your financial goals.
But said so, here are a few extremely important things you must follow to ensure you are never cheated by your financial planner. • Always make the cheques account payee only. Always write your cheques payable to mutual funds, brokerage firms, or insurance companies. Never write a cheque made payable to your planner. Cross all cheques as account payee, write your name and the purpose of the investment on the reverse of the cheque, mention your cheque number and bank details in the application form.
• Do not have your financial planner as a joint owner or beneficiary on your accounts. The only place your advisor's name should appear on documents is as the broker /distributor /agent of record, with their code. Also ensure that after you hand over a form, no additions are made to it. The easiest way to ensure this is to cross out all empty places in the form, before handing it over to the planner.
• Do not lend money to your financial planner. At no point should your financial planner ask you for a short-term loan or use your financial information to support a cause of his own. Every planner is governed by a Code of Ethics and must maintain confidentiality at all times.
• Never sign a blank form or contract. Cross out all empty sections, especially the ones that contain details of joint holders and nominees. Never sign a blank instruction for repayment or encashment of your investments. Many investors have lost their entire investments by signing blank instructions.
• Do not let your financial planner forge your name. While you might think this could prove convenient, helping you save a lot of time, you are opening up to chances of fraud and even trouble with the law.
• Never let your financial planner use his address on your account statements. See that it’s your address on the account statements, investment papers, etc. It is you who should receive the periodical statements directly from the bank, insurance company or brokerage firms, not your planner. Always insist on statements made on using proper firm stationery, not just a blank piece of paper.
Many of us fancy our chances of playing the markets on our own --- especially when the indices are soaring. But here are a few good reasons why mutual funds are your best bet. Reason No 1: mutual funds have much more resources than you as a small investor to do intensive research on companies and industries. Hence the chances of them selecting the right stock at the right time are much higher. Reason No 2: Since they have collected funds from a vast pool of investors, mutual funds can invest in different companies in different industries, thereby spreading the risk across the entire economy. That’s something that you can’t do with your limited resources.
We’re assuming that you still haven’t been bitten by the equity bug. But even ifyou were a seasoned investor, you would do well to remind yourself about theadvantages of stocks. One, shares are highly flexible. You can even sell them onthe same day you buy them (you can’t do that with a plot of land, can you?) Two,you have a lot to choose from, for various profiles. For instance, if you likerisk, there will be stocks that promise high returns in a short period of time.Conversely, if risk is not your cup of tea, you could go in for a `safer’ bet,and be more patient in your wait for your returns. Remember, however, that youcan never bring down your risk to zero in the stock markets.
What drives real estate prices is location. Don’tmake the mistake of investing in high-priced metropolitan areas, in the hopethat prices will shoot up higher here. In fact appreciation in these places willbe low. A thumb rule to follow is that your investment per square foot shoulddouble in five years. And that’s unlikely to happen in an already high-pricedarea. If you are not certain of your money doubling in five years, you’d bebetter of putting investing in a small savings scheme or in a mutual fund.
Higher The Price, Lower The Gains We often assume that a plot of land that is high-priced is a more attractive investment opportunity than a lower-priced one. Not true. For you should remember that as prices soar, the appreciation slows down. It’s likely that development of real estate in that particular area is saturated, and hence there is very little scope for further appreciation. So when buying land, always look at the potential for appreciation, not just the price of the land.
The best thing about new private sector players enteringthe market is not just the variety of products they offer but also theinformation they are willing to share. The first thing you should remember whenopting for a policy is that it's not only for your benefit but also for thebenefit of those who depend on you --- your wife, your parents, or yourchildren. In case something unfortunate happens to you, it's your family thatwill have to face the financial crisis. Who will take care of your parents intheir old age, who will take care of your children's education, marriage etc?We're not trying to scare you into taking insurance, but just trying to remindyou that insurance is a wise option every family person should choose. Yourinsurance amount depends on your present and future earnings and the size ofyour family. According to experts, roughly 15 times your annual income should bedevoted to insurance policies.