Let me answer the question. I am N years old and earn few thousands a month and have no investments so far. How much should I invest and where?
I get this query quite often and I am sure this is the question in many reader’s mind.
I am <SOME NUMBER> years old and earn Rs <FEW THOUSANDS> a month and have no investments so far. How much should I invest and where?
It is encouraging to see people are looking to invest and though the amount you should invest depends how much you can save per month that will not be required in the near future but the main word in the question is the last word which is where to start investing.
As you are asking me you probably will get the advice to invest into equity market and if I was in your position I will start in the Best ELSS Tax saving funds for multiple reason.
1. Forces you to be long term investor
You cannot withdraw from ELSS tax saving mutual funds investment before completing 3 years and this forces you to be a long term investor into equity market.
2. Gives you taste of returns from equity
Over an elongated period of time you are more likely to grab solid returns in equity than many other investment options and this can eventually drive you more towards investing in equity market.
3. Last Fiscal for ELSS
DTC makes ELSS mutual funds out tax savings basket and ELSS will not be an option at all for investors after March 31 2012. This is our last chance to Save Tax investing in equity market because DTC does not leave any option for investor to be into market and save tax.
If you are trying to get into equity market, Tax saving can be your best option to get into the market because it not only gives you a taste of equity markets but also saves your tax.