That one time of the year when you receive your bonus and plan to invest it in such a way that you would like the money to work for you. This can be achieved if your investments not only beat inflation; but appreciate in value as well.
For wealth enhancement, there are two main functions to consider.
The first function is reducing expenses. Accomplishing this requires intelligent and diligent wealth management. Think of your wealth as water in a bucket which has a number of holes out of which the wealth seeps. These “holes” could be unnecessary taxes and fees, spontaneous purchases, poor pricing on purchases, poorly structured plans and contracts, interest payments, hand-outs, or over-staffing, among others. The more holes you plug, the more water (wealth) you keep in your bucket. Identify as many of these holes as possible and implement changes that will help eliminate this seepage.
The second function is increasing returns. This involves monitoring and adjusting your sources of profit on an on going basis. It may sound like a lot of work, but it is very rewarding and worthwhile when you see the results. This process begins with careful scrutiny of financial and investment portfolio statements. It is only by monitoring your rates of return that you can get a sense of whether or not you are moving in the right direction. By taking an honest look at performance, you can catch problems before they escalate and make adjustments to capitalize on opportunities. This is not something that will happen by itself so it is worthwhile to pay attention to all of your income sources.
Reducing expenses is something personal and one can do that by writing down the daily expenses and working towards eliminating or reducing them.
Unit linked insurance plans is one option which offers wealth enhancement. High returns, flexibility, liquidity and protection are some of the key features required in a wealth enhancement product. ULIPs also offer tax benefits which may or may not be offered in other investment products. The other benefit is that you can switch between funds. While opting for ULIP it is important that you look at the previous fund performance. Also it is advisable to consider ULIP as a long term investment plan for better benefits.