Investing your hard earned money is most important aspect of managing your money. I always feel that without having a financial plan there is no necessity to invest for tax benefit. Since it wont be of any benefit.
I have observed the following pattern, most of the investments happen during the Jan, Feb and Mar months of the year since that is the time people start realizing that they need to have investments in order to benefit from tax. I am totally against this philosophy. It does not make any sense to me. If government gives a tax break it certainly means there is something behind it. Everyone around us don’t think in those terms. We are happy to be in debt in order to get a tax benefit. If you are that category then it would make sense to you not otherwise. I always feel that government should genuinely give tax break say for investing in stocks but it is not so.
According to me, Investment should be made as investment and not for the purpose of tax break. Generally investments are made on Mutual funds, Life-Insurance, ULIP and on similar financial instruments during the start of the year since we get tax benefit on only these financial instruments. These products sell like hot cakes during this time. Since only these products are advertised and shown to the high paid professionals, they prefer these instruments as they are very busy with their life and stick with these. Truth is that not many business man prefer these instruments since they know that it is not for them. These products are tailor made to high paid professionals. Since these professionals can’t think as they have no time to think about all these products. They assume that it is best financial instrument that anyone can get and pour the money. Truth is there are many good financial products which can be used only if planned properly else only last minute pouring of money happens and I am sure most of them would have not got the returns on investment as assured by the agents of these products.
Start planning your financial future as soon as possible. If government gives you a tax break of 1 Lakh think of all possibilities that can be there and then invest your hard earned money else it does not make any sense. You can pour money in either of the products its all the same.
Choice is yours! Either plan up or screw up!