Financial Plan for your life !
How should i plan my life ? - Hope you will get your answer after reading this....I was talking with an LIC Officer about Tax savings investments and insurance
Below is the dialogue..
LIC Officer:I Will suggest you a good plan, before that can you tell me your net salary ?
Me:I take home Rs.10000 (Don't you think i am worth more ... ? LOL - Rs.10000 is just an example)
LIC Officer:Good, Let say that you live for another 40 years and would earn for the next 20 years !
Me: Let it be, What is your point ?
LIC Officer: If this being the case - you should have Rs.2400000 (Rs.10000 * 12 months * 20 years ) after 20 years from now to live your life atleast with the basic necessities (since cost of living would go up).
Me: OK
LIC Officer: You should take a up an investment/insurance plan which will yield you 2400000 after 20 years and would save tax on your current income.
Me: OK, Suggest me the investment per year that i need to do ?
LIC Officer: Big figure !!!
Me: OK, Thanks, Bye Bye - (Kept thinking...!)
After this conversation, i was strongly thinking about different investments - that could yield more...! (who want less ?) - There are problems with these recurring investment plan.
We can look at one time investment plans too - like PPF, NSC or Mutual funds which will benefit us on tax but would have very poor returns. If you have any fear of losing your job ! - this type of investment choice would be great. If you just want tax savings and less returns - this would be a good option.
One more point i observed is, that the "LIC Officer" was much traditional in his thinking - means -
1) Thinking about fixed salaries and
2) Normal growth rate in career (10%) etc.,
Anyway, i have a big picture of a this useless thing (useless thing ?).
Yes, Soon i would be moving to a tax free country !
Any thoughts on this ?
Note: Rs Means INR (Indian Rupee)
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Comments
Jayaprakash Naik P () (URL) - 20 February '06 - 23:07 - Reply on Jayaprakash Naik P
Hi,
If a individual can save x amount…then that x amount can be saved for a life time.
If one can save about Rs. 5,000.00 for example in a NSC. for a period of 6 years. Then he/she can have 5,000.00 for a life time. cos the NSC doubles after 6 years on
For example
March 2006 – Rs. 5000.00
April 2006 – Rs. 5000.00
......
......
......
......
April 2012 – Rs. 10,000.00 (on maturity, the amount doubles in NSC after 6 years), Re-invest Rs. 5,000.00 back into another NSC.
May 2012 – Rs. 10,000.00 (on maturity, the amount doubles in NSC after 6 years), Re-invest Rs. 5,000.00 back into another NSC.
This chain will continue, the best part is that one does not have to pay the Income Tax for the NSC.
Well Knowledge is share…as i believe in sharing is caring.
Jai Hind
Jayaprakash Naik P
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muthu () (URL) - 09 March '06 - 01:23 - Reply on muthu
- Good, but this kind of doubling does not happen, since NSC interest % has come down. As i told you – we dont have good returns for tax savings investment. Anyway…, if there is any such scheme – which would give me returns like mutual fund and would help my tax savings, i would be happy.