Why we need long term investment plan for financial freedom

It is not adequate in today’s world to earn money all the time. Sometimes to lead a luxurious life and make the dreams fulfilled, it is necessary to make Long term Investment plans. This would help in completing all your dreams that you have a dream for yourself or your family. It is a loss of opportunity when you keep your money idle in the bank account. Smart Investments would help in fetching in good returns. Let’s discuss why we need a long term investment plan for financial freedom.

Financial freedom would help in making or establishing the decisions that you wanted without impacting your financial conditions. You would always stay prepared and also can control your financial conditions. It rather brings up financial security and provides benefits as a surplus with your income.

Different ways you can perform investment

Some traditional ways prevail in investment along with some modern options. These are the popular modes of investments that anyone can opt for.

Stocks

Investments in stocks or company shares are always been a popular investment method. Once you buy company stock or invest in the company share it helps you to get the ownership of the company. This, in turn, helps you to grow with the organization for which you have brought the shares. This is a perfect example of the long term investment plan. However, it should not be equated while trading in the stock market because it might turn into a speculative way.

How to select the best stocks for long term investment

Mutual Funds

For decades, it has been a popular activity in Investment. It helps in earning Optimal returns through different types of investments in Mutual Funds. The mutual funds help in investments in various securities. There are Equities, wherein the primary investment is performed in Stocks and then followed by the instruments with equities. There are debt mutual funds, wherein the investments are performed in bonds and papers. If you want to invest in both equities and debts, then you can opt for hybrid mutual funds. Mutual funds are convenient because they can be initiated and ceased as per your preference.

Read more about mutual funds

Fixed Deposits

It is a trusted and popular investment vehicle that would protect your capital and would provide assured returns. These are for the investors who are conservative and ideal for those who do not want to take any risks. You can visit any Bank and opt for this service with various periods. The interest rates change and might fluctuate with the economic conditions. Investors can also avail of a loan and it also offers a tax saving variant that is available with a lock-in period of 5 years.

Recurring Deposits

Investors can put a specific amount every month within a predefined period. Commercial banks and post offices offer these services. The financial institutions, who provide this service – define the interest rates. It helps investors to invest in a small amount monthly and yields a corpus within a defined timeframe. It is the perfect investment plan with guaranteed returns.

National Pension System 

It is a new tax-saving system that is embedded with investment plans. Investors can earn high returns; however, they have to wait until their retirement. The maturity amount of the National Pension System is not entirely tax-free. However, investors can purchase a portion of the annuity. This, in turn, would yield a regular pension for the investors.

Employee Provident Fund

It is a popular investment vehicle that helps the employees during their retirements. It is generally deducted by the employer from the salary of the employee. EPF is entirely tax-free and the interest rates are decided quarterly by the Government.

Long term investments have several modes; however, it is the individual who should understand the effective way to invest. Age turns out to be a crucial factor because the younger generation has got minimal responsibilities along with a longer time frame. It helps in increasing the investment amount along with the tenure. Moreover, the increase in the income of the individual also helps in planning the investment. Equity mutual funds are majorly preferred by the youths. 

Investments should be chosen with care because they might also act adversely. Moreover, there is a generic statement, which defines that; a similar investment plan cannot fit everyone.

Conclusion

Investment is important and it ensures financial security for the present and future generations. We are earning from our salary which is a defined source of income for the individual every month. However, the Long term investments would always help us to provide a secure and rational way to earn money through dividends.  It helps in controlling the impulse in your expenses. These investments would secure the future and would also help in eliminating and avoiding debts. Moreover, these investments would also help in paying our liabilities on time irrespective of our source and amount that we earn monthly. Savings would turn into automagical and would yield high returns after a specified period. Therefore, if you are looking out for the right financial support then you should opt for a long term investment plan which in turn would help in bringing financial freedom individually as well as for your family.