-------------- SIP meant ULIP in this discussion ----------------------
Let us consider Moti is 23 years old and got his first job say 3.2 Lpa (22.5 k In Hand post deductions like PF Medical etc). Note: At this salary Moti does not pay any income tax.
He stays at a Metro City like bengaluru and prefers to stay at a PG with his office friend (8.5k two sharing + Food). He is now left with 14k. He uses 1500 for his cab bills or public transport for office commute. Another 1500 for his travel to his hometown , to & fro.
He saves money by doing exercise at home and eating healthy food instead of paying for cultfit one year membership and barely visiting.
Assuming he spends 12 over a year on his clothing expenses (Cloting/Shoes/Sunglasses etc)
All in, Moti is left with 10k
Now, if Moti is wise and visionaly, he would play safe by investing in SIP's (ULIP). 5k permonth for 10 years. He is still left with 5k per month for vaction, gifts for his parents sibblings.
Reason:
1. He doesn't have lumpsum money to invest in MF
2.Doesn’t have money to Invest in property
3. Returns in LIC or FD where returns are fixed are very low over 10 year period.
4. Moti will need lumpsum money here.Investing in FD'd like UCD, AU etc other banks which give high returns luke 8.5% is bit risky. This is taxed but Miti will not have to pay
5. Longterm benefits, in SIP, say 10yrs are astonoshing.
6. Stock market - too risky, hit or miss. If it is a miss it turns out to be a waste of time
7. Most important, returns in SIP (ULIP)are Tax Free under section 10 (10D) of Income Tax Act, 1961 *
He stays in the same company which pays him hike 5% per year, but he learns a lot. Stay's away from the three distractions mobilephones, alcohol/drugs/smoke and most important is WOMEN. He makes his first move with a raised salary of 12 Lpa. Everything now changes for him. This is a different story..stay tuned. this situation has more options, will discuss in comments if needed.
1
. Wondering why you didn't reply to the guy who shared his large cap MF returns 🤔
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