Financial Goals 2022: 4 Smart Options to Invest your Money.

A new year means setting goals. While maintaining good health remains the top priority, reviewing your financial health should also feature in your checklist. After all, the more you save now, the more that money will multiply or compound as time goes on. Here are some financial goals (personal) recommendations that you should consider in the year 2022

1. Take adequate Health insurance: The pandemic has made us realize that medical emergencies can happen anytime, and therefore it’s prudent to take health insurance at the earliest. Good health insurance can be a saviour as it covers your expenses, both pre and posts hospitalization and other treatment charges, giving you peace of mind too.

Points to keep in mind:

• Take health insurance at an early age as it gives you better coverage.
• Don’t only rely on the coverage provided by your employers as it might not be adequate, so it’s better to complement with another health insurance from the market.
• While selecting a health insurance policy, check the plans they offer (coverage, benefits, network hospitals), the waiting period and the customer reviews.

2. Secure your family by buying a Term plan: Simply speaking, a Term plan can be explained as a life insurance policy that offers a specific sum of money to the insured person family in case of his untimely demise. In a term plan, the policyholder (the person who is insured) has to pay a fixed premium for a specific term and in return, the insurance company will give the monetary benefit to the nominee of the plan.

Points to keep in mind: 

• It’s prudent to buy a Term plan at an early age. That way you have to pay less premium on the policy.
• Choose a term plan with the right sum assured. A rule of thumb says you should look at a life cover of around 10-15 times your annual income. But do consider factors like your age, expenses, loans, cost of living, and inflation before choosing the cover.
• The ideal tenure of your policy would be your retirement age minus your present age. For example, if you are 30 today and wish to retire at 60, then the tenure of the policy should be 60-30, which is 30 years.

 It is easier to compare health insurance and Term plan from different insurers online at websites like Policy Bazaar. 

3. Purchase Gold Bonds: Instead of physical gold, one should invest in digital gold, preferably sovereign gold bonds. Sovereign Gold Bonds are the government securities issued by the Reserve Bank of India. So here, by not holding gold in physical form, you are not only eliminating the risk and storage of the gold but also, benefiting from the capital appreciation and interest earnings every year. Gold bonds give a 2.5% p.a. return over and above the actual price of gold on the day of sale.

Points to keep in mind:

• Gold bonds involve a maturity period of eight years, though could be liquidated after the fifth year onwards, subject to certain terms and conditions.
• The minimum permissible investment will be 1 gram of gold and the maximum amount will not be more than 500 grams per person in a fiscal year.
• Investing in gold bonds should be looked at as a portfolio diversifier only and one must not allocate more than 10% to 15% of your total portfolio towards gold.

4. Invest regularly in Systematic Investment Plan (SIP): If you have long term financial goals or dreams to achieve, investing in your preferred mutual funds through a tool known as SIP could be one of your best bets. The benefit of SIP is that it allows you to invest fixed small amounts regularly to create wealth over a long period. The returns that you get on your investments grow large over time. investing through SIP also gives you freedom from worrying about the market fluctuations or not finding time to invest, as the money is invested automatically in the schemes.  

Points to keep in mind:

• Always choose the right fund and the amount keeping your financial goals (short-term or long-term) in mind. 
• Before selecting the fund to invest in, Check their historical performance. It should have a good track record of returns irrespective of market fluctuations.
• You can use an online SIP calculator to calculate your monthly return on a SIP and get an idea of your final maturity amount.

What are your personal financial goals for next year? Do let us know in the comments.