Saturday, 18 December 2010

Maximize your return form investments with simple steps

Investing money is really separate way of making money than make money with our daily work or business. When we invest we just invest our hard earned money and it will grow itself. We should not do any additional work for the same. If we invest in any bank fixed deposit the interest will be added automatically and we should not do anything for it. Just like mutual funds, government securities, stock etc. Investing is a good way to create wealth.

But when we invest we must know how to invest and where to invest. We cannot completely depend on any experts. We have to take decision ourselves. We must create our own wealth. Just it is your life and your future, so you have to take decision. Here I am going to give you some guidelines to maximize your wealth. Try to get most of your investments

Tax free Income schemes.

Most of the outcome from investments is taxable and the tax may be deducted at source also. A good percentage of money will go as tax. It is for the existence of our country and for the development of our country. Sure we have to give tax. “Give to Caesar what belongs to Caesar, and give to God what belongs to God”. But there is some investment which does not attract tax. Some Government securities and saving investments such as Public Provident Fund (Interest from Public Provident Fund), Long term capital gain form shares (Capital gain received from the transaction of shares which are held for more than one year) etc. are tax free income.

If you get 10000 bucks as PPF interest and you are in 30% Tax bracket this 10000 bucks is equals to 14286 bucks in any taxable income investment. (After 30% tax from 14286 the net gain will be 10000). So find such schemes and invest in those schemes. Long term capital gain from sale of immovable property such as land or building also can be escape legally from giving tax by purchasing another immovable property with the capital gain you earned within a stipulated time limit. The Long term capital gain also will be calculated with the variation in price index also. So you can save a good amount of tax. Learn all these type of investments and plan your investments accordingly to save tax and grow your wealth.

Watch the market trends and make profit.

You can make money from stock market in any trend, whether is bearish or bullish, only in rare situation the whole sectors of stock become loss like recession etc. So watch the market well and diversify your stock trading in various sectors of stocks. You can make a good profit and your risks can be calculated if you are watching the market well.

Mutual funds

When you invest in mutual funds, evaluate the performance of the fund house and fund manager with regular time periods. And if the performance is not good, change the fund house of fund manager as the case may be to make a good profit out of your hard earned money.

Make tax saving investments

Under section 80C, 80CCF etc., allows you to get exemption from tax up to a certain extend of your investment. Avail maximum benefit from such investments.

Reduce or pay off your loans as soon as possible

This is also a method of creating wealth. If your keep your loan, your wealth will be gone out in the form of interest. So try to pay off your loan and pay off the loan with highest interest rate first.

If you are aware of these simple points, no doubt you can multiply you wealth faster. So follow the above mentioned matters thoroughly and try to learn more such tricks and tips to become a successful investor.

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