I am an IT employee based in Bangalore. I believe in saving or investing in high quality assets rather than wasting my money in collecting liabilities. Every month I look for options where I can safeguard my earnings and make sure that I have a healthy post-tax return of more than 8 per cent. However, I have not been able to find much investment options in this regard. The closest I have found is an FD option with Yes Bank Savings account promising an yearly 7.95 per cent interest rate for 24 months (coming to 8.19 annualized yield). But the post tax return would be around 7 per cent even here. Would like to hear from experts on a few avenues of investments where one can earn safe, inflation-beating post-tax 8 per cent returns. Some relevant Information- I invest in equity funds via Systematic Investment Plans (SIPs) with mixed results. I have not tried hybrid or debt funds yet.
- Sarth Rastogi
It is not surprising that you couldn't find a safer avenue that offers more than 8 per cent return. In fact, safer avenues are unlikely to offer inflation-beating returns. You need to take a little extra risk to earn better post-tax returns. That is why it is important to invest in equity. Since you already have investments in equity funds, you know that you can bring down the risk of losing money if you hold on to your investments for a long term.
We would like you to adopt a goal-based investment approach. List your various financial goals in life. Opt for safer avenues like bank deposits and debt mutual funds for goals that short to medium term. Invest in top-rated equity mutual funds to achieve your long-term financial goals that are at least five years away. Before embarking on your investment plan, create an emergency fund (to take care of your living expenses for six months), buy a health insurance plan (for you and family) and life insurance (if you have financial dependents).
This article was originally published on January 08, 2016.
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