The Fantastic Four – Know this before Investing
When we go for Investing, we just blindly putting our money into some products that are ready to sell. We are not aware of the basic analysis about the term, Money or Finance. But still, our goal is to achieve a good profit on expectation.
One can put their earned or reserved money into financial products, stocks, real estate property or any commercial things. Here are the four important things you should know this before invest it.
Fantastic Four (SLRT):
These four things are the primary that one should follow, before investing. For Instance, if i am going to put my money in a bank deposit – What about the safety of my money ? We need the least thing of Capital Protection rather than Capital Appreciation. I am not telling the Capital Appreciation is not important, but Protection is the primary one for anything.
The Liquidity is nothing but, a cash – If i need my money that deposited, i want to bear to take it on anytime. So, the liquidity gives me a freedom on Personal Finance. The third thing, our goal of expectation. Why we are come here to invest ? We want a better returns on our Investments, so that we can fulfill our financial goals, beat inflation or whatever we desire.
The final one is the post processing of our investments. We had chosen a good product, liquidity is also available and the returns are also better, but after the returns – can we take the whole returns. So, we need to calculate our Real rate of Return or Post returns.
For any investments, the Tax is the essential one that we have to owe. Tax efficiency product is a ideal for the real return on our Investments made. Coming to our bank deposit, we can have the safety, liquidity and may the better returns upon the inflation status, but the tax would not be efficient (Not for all). Here, we have to find any other alternative investment products.
These four things are depending upon the Individual’s Financial Status. If an Investor is not a tax assessee, he can choose a product according this. if he is a tax payer comes with a higher bracket, he can opt for a better return and tax efficient investment. So, keep in mind while you are going to plan for Financial Goals like Education, Retirement or Cash flow.
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