I remember the first time when I got a job offer. A software engineer job with a company based in Chennai with a good pay package. I felt it was a huge sum. (It dawned on me later that it was not so big as I originally thought). My parents then, may not have been earning so much. I was wondering what I would do with such a huge salary! Once I joined the company, I wanted to plan my income tax and savings. But, there was no body out in my circle of friends and relatives who could help with that. Adding to the complications, I changed my job in my first year itself. I submitted all my investment proofs in the previous company. The new company did not cut income tax for the few months when I worked. I was happy. Then, while filing the income tax, the auditors who came calculated a huge tax which I paid promptly - they were auditors right? They must have calculated correctly! The assumption was wrong. The auditors added up the salaries at old and new companies and did not even take into account the investments I had made. I realised it only later. I now consider that as a fee for learning how income tax filing works and a penalty for not doing my own tax returns filing.
There are some crazy things which I did in the first 2 years of my job. Started a recurring deposit; bought some gold; bought a car in loan; opened a demat account and piled up around 30 different securities each for tiny sums; The craziest of all: Started a 6 month SIP! Adding to the list: 2 whole life LIC policies and another market linked one time premium ULIP from LIC apart from regular annual premium paying ULIP!
I was introduced to mutual funds by one of my colleagues. He came with me to the nearest bank and helped me buy the first tax saving MF. Later I opened a demat account and started trading in shares. I bought mutual funds - so I know what shares to buy, right? Again, wrong assumption!
It was not until after I finished my second tenure in college, I realised the importance of long term planning.
There are a lot of financial products available and not every thing is for everyone. There are a few suited for some people which may be completely out of place for others. And a few financial products are outright bad - helps the sales people and the product manufacturers at the expense of investors. ULIP is the top name in that list.
As with the investment opportunities, are there the avenues and ways for expenditure. Again, one needs to be watchful of mindless expenditure. There are expenditure which people consider investments - this is a tricky trap. If you expense on something considering it as investment, you are denying yourself an opportunity for learning as well. Among these tricky traps are the expenses on car, car accessories, house purchase, house enhancements, mobile phones, laptops, bikes and many more!
There are some crazy things which I did in the first 2 years of my job. Started a recurring deposit; bought some gold; bought a car in loan; opened a demat account and piled up around 30 different securities each for tiny sums; The craziest of all: Started a 6 month SIP! Adding to the list: 2 whole life LIC policies and another market linked one time premium ULIP from LIC apart from regular annual premium paying ULIP!
I was introduced to mutual funds by one of my colleagues. He came with me to the nearest bank and helped me buy the first tax saving MF. Later I opened a demat account and started trading in shares. I bought mutual funds - so I know what shares to buy, right? Again, wrong assumption!
It was not until after I finished my second tenure in college, I realised the importance of long term planning.
There are a lot of financial products available and not every thing is for everyone. There are a few suited for some people which may be completely out of place for others. And a few financial products are outright bad - helps the sales people and the product manufacturers at the expense of investors. ULIP is the top name in that list.
As with the investment opportunities, are there the avenues and ways for expenditure. Again, one needs to be watchful of mindless expenditure. There are expenditure which people consider investments - this is a tricky trap. If you expense on something considering it as investment, you are denying yourself an opportunity for learning as well. Among these tricky traps are the expenses on car, car accessories, house purchase, house enhancements, mobile phones, laptops, bikes and many more!
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