You may have spent a good part of your life believing that only bank savings are enough for your future and that investments are not your cup of tea. However, this is far from the truth; investments are quite flexible and can be for everyone, provided they know how they want to invest.
 

Many investors add life insurance to their investment plans by investing in ULIP insurance and/or opting for a mix of risky and safe investment plans in India to balance their portfolio and earn the desired returns. To start an investment plan, you do not necessarily need to be a market expert; there are also a number of investment plans for beginners in India that offer everyone wealth creation opportunities as per one’s risk profile and investment goals. Here is how you, too, can create a suitable investment plan for yourself.
 

Meaning of Investment Planning
 

Investment planning, in the simplest sense of the term, means determining what plans, schemes, and assets you can choose to invest and grow your money. This can be planned on the basis of your short-term and long-term investment goals, your investment horizon, and your financial capacity.
 

It is important to have an investment guide because today, there is a range of investment options, each with its unique features, which can meet the different needs of investors. For instance, a ULIP plan can be a suitable investment option for those seeking the combined benefits of life insurance and market-linked investments under the same policy.
 

When it comes to investment tenure, you can choose between options that are suitable for your short-term goals or your long-term goals. Generally, when investors want to go steady with bigger investments, they opt for long-term investment instruments, especially the ones offering returns. This ensures a certain stability in the investment even when the market conditions are not.
 

On the other hand, short-term investments may carry more risk but are still essential for many investors who have immediate financial goals to be met. Such investors also choose to lower their investment risk with the help of a simple life insurance policy such as a term plan, a whole life insurance plan, or a savings plan with guaranteed¹ returns.
 

The crux of investment planning is that the roadmap should be well thought out and detailed and should cover a span of the next 10-15 years, if not more. People also plan over a longer tenure so that they can utilise the returns from their Unit-Linked Insurance Plans to meet their future goals.
 

Guide to Creating an Investment Plan
 

You can refer to this brief investment planning guide to understand how you can go about planning your finances and investments:
 

• Assess your finances
  
  Before you start any investment, it is necessary to consider your current financial condition. This will help you get an idea of how much you can invest every month without affecting your other expenses. Also, understand that investments should be disciplined – you cannot stop them halfway if you want long-term returns. Therefore, draw up a plan where you consider your income and all your expenditures, after which you can calculate the disposable income.
  
  Or, you can simply start with a small and fixed amount of your salary each month that can be invested in an investment instrument of your choice.
  
  
• Plan your goals
  
  After you know what your current financial situation looks like, it can be easier to move to the next step. Identify your short-term and long-term goals so that you can plan your investment tenure accordingly. As far as possible, opt for long-term investments plans in India that have a lock-in period, such as a ULIP. For your short-term goals, you can opt for more liquidity investments. Also, your goals should be as realistic and achievable as possible.
  
  This is essential so that you can start an investment with a clear goal, and when you get your investment returns, you will not fall short of financial resources.
  
  

• Know your risk profile
  
  The needs of two investors will be different. Therefore, the amount of investment risk one takes to fulfil their goal may not be the same as the other one. Your investment plan will certainly be influenced by how much risk you can incur or the level of financial losses you can bear when making an investment. Of course, a well-planned investment means lesser potential losses, but no investment is ever completely free of risks.
  
  Your risk appetite and your risk capacity will affect whether or not you are prepared for high-risk investments or if you should just opt for low-risk ones.
  
  
• Choose your investments
  
  After creating a plan and assessing your risk profile, you now have a range of investment options to choose from. These can be investments offering fixed-income returns, guaranteed¹ returns. An important part of investment planning is to educate yourself on the various options available. Be it a savings scheme or a stock investment, you should know the smallest details of your investment, irrespective of how much you invest.
  
  You can also combine your investments, some with medium-to-high risk and others with low risk, and also plan how much to allocate to each of them.
  
  
• Conduct timely reviews
  
  It is not enough to make an investment and then leave it aside for the years to come. It is important to conduct periodic reviews throughout the investment tenure, which should happen at least once every 6 months, if not less. This will help you identify if some of your investments are not performing well enough. By doing so, you can choose to switch to some other suitable investment.
  
  If you choose to stay with investments that do not perform well, you can lose out on your investment tenure, affecting the expected returns.

Conclusion
 

When you opt for a Unit-Linked Insurance Plan, you have the liberty to choose from an array of different funds that will help you meet your target. 
 

L&C/Advt/2022/Dec/3312