People, in common parlance, may perceive the word Investment differently. To some it may mean having Insurance policies, to some it may mean investing in Equity and Mutual Funds, to some it may mean having fixed income instruments etc. in their portfolio.

However, the word Investment is very broad in its meaning and implication. Taking a holistic view, Investment should be perceived as something that covers risks reasonably, creates wealth and takes care of you during your Golden Days (Retirement). Quite some number of us, while investing, are more concerned about the amount of Commission (Kick-backs) that the agent/investment advisor will provide rather than being concerned about the quality of investment and the respective returns. What we don’t understand is that if we end up losing interest when not adequately remunerated then so can the respective investment advisor. Result is low quality of investments and hence lower returns.

There is one more issue, among others, quite some number of us are not concerned about the fact that we need to have clearly defined investment goals wherein we need to go towards creating an Investment Portfolio which takes care of risk, wealth and retirement.

Basis priority, one must cover risks first, which involves Mediclaims, Term Insurances etc. Please note that investing in Unit Linked Insurance Plans (ULIPs) is not always a good idea as we must keep Insurance and Wealth creation separate.

Then one should move towards wealth creation and retirement planning by investing in a Portfolio which involves fixed income instruments, Equities, Gold/Silver etc. depending upon our investment goals, horizon, risk appetite and all.

Care should be taken that while creating an investment portfolio one must take Income Tax provisions into account so that Return on investment can be optimised.

Last but not the least, be more concerned about meeting your investment goals rather than Kick-backs because if low remuneration demotivates you then it might as well demotivate your investment advisor !!!!

(Author Details- CA Sahil Jolly – Jolly & Co. Chartered Accountants, Contact: +91-9999830077, Email : casahiljolly@gmail.com)

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