5 common financial planning mistakes that you must avoid

5 common financial planning mistakes that you must avoid

1) Medical Insurance -

a) Have independent family floater apart from that provided by employer

b) Amount of cover to be commensurate

c) Which Cities are covered

d) Aspects like Limits on Room Rent

e) Waiting Period

f) Exclusions

g) Disclose Medical History to the Company

2) Life Insurance

a) Dont mix term insurance and investments. Money back LIC Policies are a strict NO

3) Mutual Fund

a) SIP for ELSS is better than lumpsum amount in Jan-Mar

b) Dont go for Dividend Schemes. After DDT-dividend distribution tax , there is a massive leakage

c) Direct Plans may not always be good if you have no idea. Better use a seasoned Financial Planning. Because aspects like change of fund manager of a top performing scheme may catch you unawares.

d) Avoid Thematic Funds

4) STOCKS

a) if a tip comes on whatsapp, its already priced in the market

b) Dont invest on the basis of advice from Tom, Dick and Harry

5) PPF, VPF, NPS, SSA

a) Invest by the 5th of April in PPF and by the 10th in case of Sukanya Samridhi Account . Its the best fixed income option

b) Use SIP for NPS instead of Jan-Mar

c) Use maximum amount of VPF to earn good interest