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Do you have savings of Rs. 4000 per month?

  12/22/23 9:30 AM

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You probably think that ₹4000 is a small amount these days. You may spend it on shopping, dinner, or a weekend getaway. But you know what? This small amount of ₹4000 can contribute towards growing your wealth. It’s exactly the right amount to start a long-term investment.

Here are a few things that you can do with a saving ₹4000 that will make you a smart investor.

Protect Your Future with Insurance

This is a thumb rule, before you plan for the future, ensure that you secure it! Start first by opting for a comprehensive term plan that can protect your family’s future in your absence and secure you against critical illnesses. This will give you peace of mind that your dependents won’t have to worry about financial challenges in your absence. Term insurance plans like Edelweiss Tokio Life- Zindagi Protect provide a high sum assured for a relatively small premium. In fact, the minimum premium offered by this term plan is just Rs 300 per month!

Take the First Step Towards Growing Your Wealth

A systematic investment plan is perfect for those who like to make small but regular investments. The key formula to grow your wealth is not to invest a huge stash of money in one go but to invest small amounts regularly for a longer duration. All you need is a bit of disciple and commitment.

Insurance Can Also Grow Your Savings!

Term plans are affordable and offer high life cover, but the downside is that the money you invest is gone forever. Most term plans don’t offer any returns once the policy comes to an end. On the other hand, guaranteed income plans and Unit Linked Insurance Plans (ULIPs) have higher premium rates, but they offer a better return on investment.

Guaranteed income plans ensure that you have a secondary source of income after you finish your premium paying term. With a small monthly saving, you can get both life cover and an income boost that can help you fulfil your dreams. The best part of guaranteed plans is that you know exactly how much money you will get as returns.

ULIPs are insurance plans that also include an element of investment. Each ULIP comes with a selection of market-linked funds to choose from, and a part of your premium is then invested into the funds of your choice. Your returns will depend on how well your funds are performing.     

While ₹4000 may seem like a small amount, regularly investing this small amount will eventually lead to a sizable investment portfolio! If you invest ₹4000 in an ULIP for the next 20 years, assuming 8% rate of returns, you will generate a lumpsum of around ₹19.89 lacs! Unbelievable! Isn’t it?

It’s hard to think long-term when you are younger, but it also happens to be the smartest time to start an investment portfolio. So, the next time you splurge on luxuries, shopping, or a weekend getaway, remember that this small amount of ₹4000 can actually help you achieve your future financial goals. While enjoying life to the fullest is necessary, planning for your future is also important. Ensure that you maintain a balance between your monthly investments and spendings.

 

Swati Tumar - Travel & Finance Writer   

Swati is a Writer in the day and an illustrator at night. Among her interests, she is quite fond of art and all things creative. She often indulges herself in creating doodles, illustrations, and other forms of content. She identifies herself as an avid traveler and shameless foodie.

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