5 things you should do at the start of every financial year
April 22, 2017
Rebalance and diversify Your Portfolio
Do you park all your surplus funds in Fixed Deposits? Or are you someone who is an avid believer of investing in stocks? The risk associated with investing in a single instrument is fairly large. Diversification across asset classes is essential to ensure we do not suffer a major setback during years of softer performance. Roughly, 100 less our age should be our ideal equity exposure. And remember to count your PF as part of debt exposure.
Salary increment? Increase SIP amounts
To keep pace with the rising expenditures, it is essential to invest more in our SIPs (Systematic Investment Plans). It will not only keep a check on our rising expenditures but also prove to be a reliable source of money in the long run. So top up your ongoing SIPs with a portion of your increment.
Start an SIP now, if you haven’t already
The concept of building a corpus bit by bit is something we all learn in our childhood – Flashback, the good old “Gullak” days! But as we grow up, we tend to get busy with other supposedly more important things. It is time we get to the basics and bring that habit back in practice. SIPs are a great way to build wealth over the long run. They not only inculcate discipline in our investment habits but also cater to a range of our medium to long term goals. So what are you waiting for? Start small but start now.
Open NPS Account
The National Pension Scheme (NPS) is a government initiative to reduce the taxable income of an individual. While we all look for ways to plan our tax, starting an NPS account will help us to reduce our tax by up to INR 15,000 annually (If you are in 30% tax bracket). Now that is some healthy saving!
Get Health Insurance
With an increasing workload on an individual, there is a tendency to avoid health issues. And if we haven’t got our health insured, things can get really complicated in case of emergencies. At the start of this financial year, let’s make health our priority and get a health insurance. It will not only cover any medical contingencies but also give us tax benefits under Section 80C of the Income Tax Act.