Worst Financial Products in India

Investment + Insurance = Worst product.

What I mean to say is any product which is a combination of both Investment and Insurance can never be a good product. Because Insurance will cost money to you, Investment charges will be separate and less amount will go towards actual investment hence it will be a costly product. Never mix insurance with investment or buy any financial product which is the combination of insurance and investments.
Understand your insurance and investment need for insurance Term Insurance is the good product and for Investment mutual fund is the ideal product.

Below are the lists of such product which is combination of investment and insurance. These products are very costly so avoid such products.

• Whole life insurance plans
• Money back insurance plans
• Pension / retirement plans
• ULIPs (Unit Linked Insurance Plans)
• Child future plans
• Any INVESTMENT CUM INSURANCE product

ULIPs and other similar products are costly and gives you life cover of 5-10% of annual premium which nothing compare to term insurance. Term insurance gives you enough life cover with low premium, so take term insurance and invest the difference in mutual fund.

It Equity Really Risky?

If I tell my parents to invest in equity, they will say NO. Why? it is risky. And I am sure most of us or atleast people from previous generation will definitely say that equity is RISKY so stay away from it. Well let me tell you that this is NOT the case today. You do not have to learn direct equity investing, Equity mutual fund will do all the job for you.

Those days have become history when our parents used to built wealth with fixed and safe investment products like Bank fixed deposit, PPF etc.

The average inflation rate of India in 2011 is 8.88 %. Now if you consider bank's saving account which provides 8% annual return. According to above data you are in loss of 0.88%. Hence today equity is the must have asset class in your portfolio. Equity is the only product which can beat inflation and built ample wealth in long run.

Professionals and experts (Fund manager) are there to manage your fund, you don’t have to worry all they will just charge you 1.5% annual charge. Mutual funds are also so cheap that they will charge 0% Entry load and 0% Exit load after 365 days of investing. If you stay invested for long term, over a period of time the volatility in equity reduces and it gives you excellent returns. Hence it is must to stay invested in equity for long time horizon.

Consider equity as a major asset class in your portfolio. Start investing early and stay invested for a long time horizon and see the power of equity.

Top 10 Best Financial Products in India

Below are the lists of best financial products available in India. For effective and successful financial planning you can invest in any of the below products according to your needs.

• Mutual funds - Equity mutual fund is the best product which can help you to beat inflation and build ample wealth in long run. Mutual funds has only 1.5% annual fund management charge. No other financial product is as cheap as Mutual Funds in India as they will charge 0% Entry load and 0% Exit load after 365 days of investing.

• Term insurance - Term insurance will give you enough life cover with very low premium. Please note that Insurance companies claim that their financial products like money back plans, pension plans, ULIPs,  Child future plans etc are best products but well this is not the TRUTH. Term insurance is the only best product being sold by insurance companies.

• PPF & EPF - PPF and EPF is the best product in India for TAX saving.

• Stocks, Equity - Stocks and Bonds are also good to grown your money in long run.

• Infrastructure Bonds - Infrastructure and other bonds are also good for TAX saving and generate steady growth of your money.

• NSC, KVP, Post-office savings schemes - Government schemes like National saving certificate (NSC), kisan vikas patra (KVP), Post-office savings schemes etc are good for TAX saving and generate steady income for retirement.

• Bank saving & fixed deposits - Bank deposits are good for those who don’t want to take any risk for example when you are retired.

• Health insurance (Mediclaim) - Health insurance is also important for you and your family, which will cover your medical expenses along with tax saving.

• Real Estate - Real estate in India if chosen carefully will give you good return in long term. 

• Gold & Gold ETFs - Investment in Gold and Gold related products are always profitable.

Evolution of Money

In the beginning of mankind, there was obviously no money. People used to follow barter system, they traded items which had a practical value. Gradually, particular commodities began to be treated as the standards against which we would determine the value of other items. Metal specially gold was more practical than other forms of primitive money obviously it had a practical value. In a huge leap toward the further abstraction of money, paper money was introduced.

Barter System

Initially the entire money supply of the world was backed by gold but now followed by USA, all the countries of the world  removed the gold standard & bank notes became free float currency. Do you know that the bank notes and coins in your pocket is not the real money? Well, yes. Your 100 rupee or 5 dollar bank note in your pocket is a piece of paper without any intrinsic value.




Now, much of our money is so abstract that its only physical reality is in the form of electrons - in the electronic processes of our online banking, credit cards, internet commerce, automatic teller machines, electronic funds transfers, etc.

The Power of Long Term Investing

Albert Einstein once said that, "The Compound interest is the greatest Force in the Universe". He also said that. "The Compound interest is the 8th wonder".

Investment is not only the game of money but it's the game of MONEY & TIME both. To build wealth and become financially stressful, you don't have to just invest lots of money but you will also have to invest lots of time to work compound interest work better in favor of you.

People who started early have invested more time and time is the important element of success of financial planning.



Lets see the formula of compound interest.

Consider the following four investors ages 25 – 55. Each invests Rs.1 Lakh per year in Equity Mutual Funds and earns 20% annually. 

At age 60:

• The investor who started at age 25 has over Rs.35 Crores (In 35 years)
• The investor who started at age 35 has just over Rs.5 Crores (In 25 years)
• The investor who started at age 45 has just Rs.15 Lakhs (In 15 years)
• The investor who started at age 55 has just Rs.9 Lakhs (In 5 years)

The earlier you start the less you have to invest to reach your financial goal.

The person who starts investing at the age of 25 will invest 10 years more time than the person who started investing at the age of 35 and 20 years more time than those who start investing at the age of 45. The only way to become successful in the game of financial planning is you START EARLY & invest more time.

Investment Time Horizons

The length of time over which an investment is made or held before it is liquidated is known as Investment Time Horizons. Time horizons can range from a day, in the case of a day trader, all the way up to decades for a buy-and-hold investor example real estate.

Before starting financial planning you should know various time horizons and its products, Depending on your need you can go with below mentioned time horizon.

Shortest Time Horizon (< 1 Year) 

Shortest time horizon investment are not ment to grow your money, It’s just to maintain the liquidity of your money say for example Emergency fund. However for day trader it can be an investment but you cannot totally depend on such investment.

• Cash on Hand
• Bank Savings Accounts
• Liquid & Money market mutual funds
• Gold

Short Time Horizon (1- 2 Years)

Short time horizon investments are just to preserve the purchasing power of your money for the purpose of near future. You cannot expect very high return from it. Because of volatility equity is not ment for short time horizon.

• Short term Debt Mutual Funds
• Bank Fixed Deposits
• Gold

Medium Time Horizon (2-5 Years)

Medium time horizon investments are to compete with inflation and expect growth with time. Again due to volatility equity is not ment for medium time horizon

• Bank Fixed Deposits
• Debt Mutual Funds
• Real estate funds
• Gold

Long Time Horizon (> 5 Years)

Long time horizon investments are to multiply your money & build Wealth and can expect financial freedom. Equity is the best Asset class for long time horizon. It is used for long term financial goal like retirement or for big buy like buying home.

• Equity (Stocks)
• Equity Mutual Funds
• Real Estate
• Government & Private sector Bonds like PPF, EPF
• KVP, & NSC
• Long term mutual fund

Know about Asset Classes

Buying assets out of your money is known as INVESTMENT. Assets multiply your money and over the time make you rich and financially free.

There are 3 main categories of Assets.


Traditional Asset Classes


Below are the few Traditional asserts where mostly people do investment. Equity is the only traditional asset class which has given highest returns than any other traditional asset classes.

• Stocks - Shares & Equity Mutual Funds
• Bonds - Fixed Deposits & Debt Mutual Funds
• Real Estate or Real Estate Mutual Funds
• Metals - Gold, Silver etc...(Includes Gold ETFs)

Digital Asset Classes


Digital assets are a new generation’s asset. You can invest in these digital assets to become rich & financially free. Digital assets if chosen carefully can give you highest returns than any other asset class in this world.

• Domain names
• Blogs
• Websites
• Forums
• Online properties

Offbeat assets


Yes these can also be an asserts. Investment in these asserts will also give you good return in long run. You can login in eBay and find thousands of such asserts.

• Stamps
• Rare coins & notes
• Collectibles (Vintage toys, coke bottles etc..)
• Art & paintings
• Antiques
• Vintage jewellery