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5 Long Term Investment Options in 2018

This is well-quoted that, ‘money has wings’. The money you are holding so tight and for which you have toiled yourself day and night will fly by the time and at the end you will be left with nothing. And what is a human life without money?  It is like an ocean without water, an engine without fuel. Money needs to be spent smartly while avoiding any money crunch. And actually, your money can grow with a proper investment. Some people are smart investors, they know where to invest, what amount to invest and how to invest. While some are the new bees that learn money investment from sweet and sour market experiences. But this risk gambling of investment with the money can actually bring a great turn in your life. All you need to invest your money in the market is your wit and a sharp eye on the market. You can choose your investment plan that not only fulfills your needs, but also your investment goals.

There are various long-term investment plans in our life like education. When we get an education at school and college for 12-15 years, it is like a preparation for our future, career, and income. Education, business, marriage, insurance policy, retirement pension are a few examples of long-term investment in our life from a very initial time. Same as this, money investment is also needed for a long-term period. Money investment not only helps in savings, but it also gives a financial stability in the future. The money that you are earning is nothing but a useless bulk in the bank account, you can invest this amount and it will result in money growth.

There are various investment options in India like Public Provident Fund, Mutual Fund (SIP), Real Estate Investment, Post office monthly income account schemes (single), Equity Shares, Gold ETF, Company Fixed Deposits, Initial Public Offerings, Unit Linked Insurance Plans, bonds and etc. The best 5 long term investment plans can be explained as below –

Mutual Funds 

A mutual fund is a professionally-managed investment scheme, usually run by an asset management company that brings together a group of people and invests their money in stocks, bonds, and other securities. As an investor, the customer can buy mutual fund ‘units’, which basically represent the share of customer’s holdings in a particular scheme. These units can be purchased or redeemed as needed at the fund’s current net asset value (NAV). These NAVs keep on fluctuating each day, according to the fund’s holdings. So, each investor participates proportionally in the gain or loss of the fund. This is a gamble of loss and gain and all depends on the market. All the mutual funds are registered under SEBI. People who want to invest in equities and bonds should have a good risk appetite.

This is one of the best long-term investment options with lots of profit. Nowadays, investing in stocks is very trendy and the plans are flexible and offer total liquidity. So, let’s have a look at the best 5 long-term investment plan in the year 2018-

Life Insurance Policies

It is very important to understand the importance of a Life insurance policy. It is an important component in a person’s financial plan that gives valuable protection as well as benefits of wealth creation which investors look for in future. Just to re-iterate, life insurance is a long-term investment and protection product and should be bought on a need-based analysis, life stage whether it is saving for retirement or child education or loan protection. It is a very important financial tool. Customer pays  premium for a fixed no. of years and in case of an unfortunate event such as death or disability occurs, customer family’s financial needs are taken care of by the insurance company who pays the agreed life cover amount. Life insurance policies are long-term plans that offer multiple benefits like regular savings, wealth creation, and tax-savings under Section 80C, along with the core feature of life coverage, ensuring financial protection for your loved ones in your absence.

Best Investment Plans In India

Stocks

A stock is a general term used to describe the ownership certificates of any company. Holding a particular company’s share makes you a shareholder. The stock market tends to raise in value, though the prices of individual stocks rise and fall each day. If the investments are made in any of the stable companies in the market, then those stocks are able to grow and tend to make profits for investors. Stocks are of two types—common and preferred. The difference is while the holder of the former has voting rights that can be exercised in corporate decisions, the later doesn’t. However, preferred shareholders are legally entitled to receive a certain level of dividend payments before any dividends can be issued to other shareholders. This is an excellent long-term investment plan. It is the best way to stay away from inflation and if the customer needs. He/she can sell the stocks anytime.

Public Provident Fund

The Public Provident Fund is one of the most popular long-term investments in India. It is one of the best long-term investment options. PPF is a tax-free long-term saving instrument that encourages small yet regular savings. It is also backed by the government, making it a safe option. Public Provident Fund  falls under the Exempt (Investment) – Exempt (Partial Withdrawals) – Exempt (Pay-outs) category – which means that you do not pay any tax at any stage of the investment and While PPF rate or return varies based on government policies, it currently offers 8.1%, compounded annually, which was effective from 1st April 2016. Following are the key features of PPF –

  • Annual Deposit amount – Rs.500 to Rs. 1.5 Lakhs per year
  • Tenure – 15 years
  • Interest rate – Interest rate is announced by the government time to time. (Current rate of interest is 8.1%)
  • Tax Benefit – Deposit amount can be claimed under section 80 C. Interest amount will be tax-free.

Withdrawal – Partial withdrawal is allowed after 7 years

Equity Shares

An equity share, commonly referred to as ordinary share also represents the form of fractional or part ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights. This is one of the top 5 long-term investment plans in the year 2018. There is no fixed burden on the resources of the company and analytic the ability of profits. Higher the time, more is the return of such long-term investment plans. The equity shareholders get benefit in two ways; it is like they get benefit at yearly dividend and appreciation in the value of their initial investment.  But, the liability of equity shareholders is limited to the extent of their investment. Equity shares are the main source of long-term finance of a joint stock company; hence it is one of the best long term investment options. It is issued by the company to the general public. Equity shares may be issued by a company in different ways, but in all cases the actual cash inflow may not arise, so it also invests the risk factor.

Hence, one can invest in any of the long-term investment plan for a better profit and return along with the time. These are the few benefits of long-term investment •    THE COMPOUND:

It is well said by the famous scientist Albert Einstein, “Compound interest is the eighth wonder of the world”. The more time you give your investments to grow, the higher the amount you would get. Means if you invest a single coin today it can cost thousand after a long term.

  • Secure from short-term volatility:

It is difficult to time the market correctly, hence in order to get maximum benefits; it is good to invest for a long term. You can keep a sharp eye on the status of the market.  By staying invested for a longer duration, you can overcome short-term volatility.

  • Convenience:

There is no need to worry about the investment due date. You just need to send a one-time instruction to your bank to facilitate auto debit from the bank account or credit/debit card. One can but long-term investment plan online  easily.

  • Goal-centric planning:

As the customer is investing for a long-term, then the customer can use it to plan for significant milestones in our life like marriage, home, kids’ education and retirement, etc.

  • Tax Benefit:

Long-term investment plans make it easy to do tax planning every year. All you need to do is buy a long-term investment plan and invest regularly and avail tax benefits as per the Income Tax Act. It means, you not only grow your money but also save tax.

So, if you are looking for various ways to make a fortune with the money that you have in hand, long-term investment is the way in the year 2018.

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