Majority of the India’s population are living on a salary.
Yes, that’s right.
A salaried person is one who earns a fixed income every month and has to manage their investment and expenses within the stipulated income.
If you are a salaried person then you know how difficult it can be to manage not only your expenses, but also your family’s expenses.
A proper in-depth financial planning is very essential for you to maximize your returns, minimize tax burden and keep risk at an optimum level.
But how can you do all this?
You can do it by channelizing your salary effectively.
As you grow older, your financial needs increase and suddenly you realize that just a fixed amount of monthly
income will not be able to fulfill all these requirements.
You will need a proper investment plan which gives you ample money when needed and even completes your responsibility in your absence. With proper investing, you can make your money grow and earn high returns.
As you are earning a fixed monthly income, it is hard for you to have a lump sum amount in hand. Therefore, an SIP plan will help you keep aside a small amount monthly amount, which in due course will help you achieve your financial goals.
Building an investment portfolio can help you attain your financial goals, pay your financial debts and secure your future.
There are various investment options that you can invest in only after analyzing your risk appetite, amount of investment and expected returns.
Further, every investment option has its own pros and cons. Through investing you allow your money to grow.
Over the long run, this will help you create wealth and offer returns on your investments. Investing helps you
fight inflation in a better way.
Maintaining a decent standard of living, at a time when cost of living is increasing at such a high pace cannot be done without a proper investment plan.
Investing helps you meet your life’s financial aspirations easily.
Investment fetches you higher returns on your savings, both in the long run and within a faster period. This will help you achieve your financial goals faster.
Investing also allows you to reduce the taxable income.
By investing in a proper tax saving instrument, you can claim exemptions upto Rs.1.5 lakh under section 80C of the Income Tax Act.
By looking at all these benefits no one can deny the fact that, investment is necessary and an essential tool
to create wealth.
Now, let us look at the 5 best mutual fund plans for a salaried individual.
This scheme aims to generate long-term capital growth from a diversified portfolio of predominantly in equity and equity-related securities. It intends to invest across sectors utilizing bottom-up approach.
The scheme was launched on 29th December 2006. The return since launch is 15.54% and the scheme has a
moderately high risk grade. The scheme performed well in its category during the last year and is maintaining the same return pattern.
The portfolio of the fund contains 98% of equity assets and invests in stocks of giant companies. The portfolio is inclined towards investment in financial, energy and automobile sectors but also covers other sectors at the same time.
For a salaried person, this can be considered as a good option to invest in the market and earn high returns. Moreover, it is an equity-linked savings scheme (ELSS), which is a tax saving mutual fund and can help you claim deduction upto Rs. 1.5 lakh.
Though there is no exit load in the scheme, it tends to provide good returns if you hold your investment for a minimum period of 5 years.
Returns Per Annum
The primary objective of this fund is to invest in large-cap equity stocks to provide long-term growth to investors through active management and diversification.
The scheme was launched on 20th January 2006. The return since launch is 11.68% and has a moderately high risk grade.
The fund provides an average annualized return. The portfolio of the fund comprises basically of banking and automobile sectors with some investments in pharmaceutical, oil and gas and other sectors as well.
92% of the fund is made up of equity, which is invested in large-cap stocks.
This fund seems to provide an above average return if you are ready to invest for a period of 4+ years.
Returns Per Annum
This fund is for investors who do not want to take a risk in their investments.
The fund is a hybrid scheme which predominantly invest in debt and money market instruments. The scheme seeks to generate long-term capital appreciation from a small portion of the investment in equity.
The scheme was launched on 30th March 2004. The return since launch is 10.23% .
The scheme shown a constant performance over the past 2-3 years.
The fund invests 84% in debt,11% in equity and basically targets its investments in growing sectors like automobile, financial, construction, FMCG, healthcare, engineering, etc.
Being a hybrid fund, it is more conservative and prefers to invest in debt rather than in equity.
As a salaried individual, if you are more conservative then you can look forward of investing in this fund. Moreover, the fund has a low expense ratio and no exit load after a period of 1 year.
As per the records, it provides good returns if you plan to invest in for a minimum period of 3 years.
Returns Per Annum
This is also a hybrid fund which invests largely in debt and money market instruments and a part in equities. The scheme mainly aims to generate income.
The scheme was launched on 16th Dec 2003. The return since launch is 10.07% and it has a moderate risk grade. The performance of the fund is very good in its category.
The asset of the fund comprises 52% investment in debt instruments and 25% of the equity instruments. It
basically covers banking, pharmaceuticals, manufacturing and the automotive sector.
This is a conservative hybrid fund and tends to invest more in the debt market, so it can be considered as
a good option for a salaried individual.
Being a salaried employee, the investor might resist investment in high-risk investment options.
For those individuals, this fund can be a good choice.
Returns Per Annum
The investment objective of the scheme is to achieve long-term capital appreciation by primarily investing across different
sectors and market capitalizations.
The scheme was launched on 28th April 2014. The return since launch is 26.02%. The fund tends to provide high annualized returns by investing in the equity market.
98% of the fund’s assets are invested in the equity market and basically covers every sector of the market. The scheme contains only 35 stocks but with proper diversification to reduce risk and increase returns.
Returns Per Annum
After knowing the importance of investment when earning a fixed monthly income, you might start investing
Always remember to review your portfolio periodically and invest in a fund which is apt to your investment duration and risk appetite.
Disclaimer: The views expressed in this post are that of the author and not those of Groww