With the month of April, a brand new financial year arrives. All the last minute mad dash for completing our investments and paying taxes ends on March 31. Bankers and auditors heave a sigh of relief in April after the hectic year end activity. And the ordinary investor happily puts all his financial investment activity to the back burner. After all, he has the whole year ahead to worry about these things!
Our financial needs vary depending on our age, income and family needs. But we often see people with very similar incomes having very different financial positions. Some may be well placed, easily able to cover their expenses and still left with surplus income to be saved. On the other hand, some people struggle to meet unplanned expenses and don’t have much put away for savings. The key factor that differentiates these two situations is – systematic financial planning and allocation throughout the year.
Incomes for most people are monthly in nature. Whether it is salaried income or business proceeds, income is received at regular intervals throughout the year. So when it comes to investment, why should it be once a year, that too at the end of the year?
There is clear evidence to show that regular monthly investment methods yield much higher returns than lump sum deposits. Take for instance government savings schemes or mutual funds. It makes excellent financial sense to make PPF deposits monthly or mutual fund investment through the SIP route.
Another attractive investment route to secure your future financial goals is chit funds. By nature, chit funds are a monthly deposit scheme. So they automatically bring in the systematic saving habit in investors. By putting aside a fixed portion of your surplus income every month for a couple of years, you get access to a handsome amount of money anytime during that tenure. And this money is all yours, so no liability of EMIs to follow!
The chit fund mechanism is ideal for known and planned expenditures to be incurred down the line – an investment tranche for your business, a home upgrade, foreign holiday or college education. Shanthala Chits, a popular chit fund company based out of Bangalore, is one such option which an investor might actively consider. It is registered under the Chit Fund Act of 1982, Government of Karnataka.
Shanthala Chits has designed a whole range of fund schemes with varied investment corpus amounts – from Rs 1 Lakh to Rs 25 Lakhs. So each category of investors can pick the scheme that matches their particular need. Monthly instalments will vary from as low as Rs 4000 to Rs 1Lakh for these schemes. Over a thousand of our satisfied customers, many of whom are engaged with us for over a decade stand in testimony to these schemes. We have been in the business since 1996, with a reputation of being trust worthy and investor friendly.
Apart from household financial needs, chit funds also serve as a useful aid to businesses for their cash flow management. Instead of keeping cash idle indefinitely or borrowing money at high rates when need arises, monthly instalments can be parked in a chit fund scheme and withdrawn just in time. This ensures smooth liquidity in the business with zero liability.
To summarise, we would like to reiterate that investors must carefully plan for their short and long term financial needs at the start of every financial year. Starting off the process early in the new financial year will ensure that you have ample time to research and make your choice. A penny saved is a penny earned. It is important to ensure that your hard earned income is put to the best use in terms of timely and appropriate investments. Choose your options wisely, periodic investments are often more profitable than lump-sum investments.
Take the first step right away. Make your yearly financial plans immediately, pick the right instruments and invest in them. You can then relax and take that summer vacation holiday, while your money does all the hard work for you!
Anuradha is a freelance writer cum corporate trainer in the IT/telecom domain with over 18 years experience. She served in senior technical and management positions in Huawei and TCS for 10+ years. Then gave up the traditional corporate ladder to go solo - in order to escape horrendous city traffic and to be at her own boss!