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Portfolio Bifurcation: The Key to Achieve Financial Goals

Oct 30, 2019 | 8 months ago | Read Time: 2 minutes | By iKnowledge Team

Financial planning is an essential part of life and it begins the very moment you cash in your first paycheck. While this concept is a wide one, the basic gist of it revolves around three primary factors – Insurance planning, investment planning and savings. Your financial portfolio must present a balance of all 3 of these aspects to ensure that you enjoy a stable lifestyle.

Lack of financial planning could come to haunt you as time passes and result in a struggle of funds in the future. It’s never too late to begin though, and it starts by identifying your current financial position. The first step is to consider your cash flow – the income and the expenses that need to be tracked. This step is an uncomfortable one, but necessary at the same time.

Once you understand where you stand, you may begin to chart out your primary and secondary financial goals. Here, your life and health come first, followed by your family’s well-being, and lastly, your child’s future financial security. These are your primary goals in securing a comfortable lifestyle for you and your loved ones. Then comes, generating returns from investments, to build up a sizeable corpus. Finally, saving and preparing for retirement.

Insurance Bifurcation 

The first step of financial planning is to secure yourself against the risks in life. This ensures that you live long to enjoy the fruits of your achievements, as well as secure a financial cushion for your loved ones. The three primary insurances to consider are term insurance, health insurance and child insurance. Aegon Life offers a variety of insurance plans to meet the above requirements.

Investment Bifurcation

This part of your financial portfolio depends entirely on your risk appetite. If you are an active investor on the stock market, then you are already aware of equity and debt investments, along with various other financial instruments to generate funds. However, if you are not an active market investor, and are looking to generate risk-free return on investment, then your investment planning must consist of the following options for investment.

Public Provident Fund

PPF is the safest and most secure long-term investment in the list of best investment options in India. You can open the PPF account in a bank or at your local post office. Your investment is locked in for a 15-year time period, earning a compound interest 7.6 (current, subject to change) from this account. The returns from this fund are absolutely tax free.

Investing a Mutual Fund

Mutual funds are the best long-term equity and bond returns investment tools in the market and have proven to deliver much better inflation-adjusted returns as compared to any other investment tool. A mutual fund comprises at least 40 per cent of your investment planning and can be invested in through a systematic investment plan (SIP).

Real Estate Investment

Real estate is one of the fastest growing segments in the Indian market, with huge prospects in major sectors like housing, commercial, hospitality, manufacturing, retail and more. It is the next most reliable asset after gold that Indian investors use as security against loss in the equity market.

Other investment options include gold ETFs, IPOs, government bonds and Post Office Saving Schemes. As for saving your funds and earning interest over it, you may include bank FDs and savings accounts that provide interest on deposits. Smart investment planning is the key to good financial planning.

To know about Aegon Life’s life insurance products like health insurance and other products, visit our home page.


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