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7 Long-Term Investment Plans with Higher Returns

The foundation of building wealth and financial security is long-term investing. They give people the chance to make significant profits over a long period of time while guaranteeing long-term financial security. A lot of thought goes into investing planning, leaving you puzzled. Should I make a mutual fund investment? Should I open a PPF account or just keep making FD investments? When choosing the best long-term investment plans, do you find yourself juggling the previously mentioned questions?

Every investor, regardless of skill level, can benefit from a long-term investment strategy. This post will examine several long-term investment strategies to help you make an informed decision. 

Long-Term Investment: Why Should You Consider It?

Long-term investing aims to create wealth, whereas short-term investing is focused on capital preservation. It involves building an investment portfolio that will support your income needs throughout retirement and other long-term financial objectives. Building wealth is essential to ensuring a comfortable life afterwards and sustaining the necessary level of income in the future.

To reap the benefits of long-term investments, there is a certain amount of risk, though. It often consists of ULIPs, equity investments, etc.  However, if you stay involved for a longer period of time, riskier investment options offer an opportunity to recover from the market dangers. In the following three or five years, it might decline by 20%, but in the following ten or twenty years, it might finally produce double-digit returns. Although assets also carry less risk, their rewards are either fixed or very slow. In order to achieve the intended returns, you must, therefore, allow yourself time to recover from any short-term setbacks when considering your long-term objectives.

Long-Term Financial Objectives or Goals?

Investing for the long term can be done for a variety of reasons or objectives. The following are a few typical long-term goals for investing funds in long-term plans:

  • Saving for a Child’s Marriage
  • The higher Education of children
  • Acquiring a Property of Your Own
  • Planning a Retirement Strategy
  • Starting a Business

The ability to use the money you collect to pay future expenses is one of the main benefits of investing in long-term plans. You also receive tax savings, and there is no additional interest. After a certain amount, the returns may, nevertheless, occasionally become taxable. Furthermore, you will typically be required to pay interest of between 8 and 10% if you take out a loan to achieve your long-term objectives.

Are you still unsure about the long-term investment strategies that are the best? Some of the best long-term investment ideas are included below for your consideration.

Here is the list of 7 long-term investment plans with high returns in India in 2023

You can begin preparing to invest for the long term by choosing one of the following long-term investment programmes, which will gradually increase your wealth:

1. Public Provident Fund (PPF)

 Long-term savings are encouraged by the government-backed Public Provident Fund (PPF). Its 15-year maturity period, which can be extended in increments of five years, comes with an interest rate that is tax-free. Given its reputation for dependability and safety, PPF is a great option for cautious investors seeking long-term growth.

A conventional approach to long-term investing is Public Provident Funding or PPF. The majority of your family’s elders probably made investments in PPF schemes. It is regarded as one of India’s safest and most tax-efficient investment plans. On maturity, you receive fixed returns with no risk.

Since the lock-in period for a PPF Account is 15 years, you can continue to invest during that time. Following fifteen years, you can withdraw your money. In the fifth year, you may, nevertheless, partially withdraw (according to limits and conditions). In addition, Section 80C of the Income Tax Act, 1961 allows you to claim tax benefits on your PPF contributions up to Rs. 1.5 lakh throughout a financial year.

2. Investing in Mutual Funds

One of the strongest possibilities for creating long-term wealth is investing in mutual funds. Since SEBI regulates all mutual funds, the investments are secure.

Mutual funds are primarily divided into three categories: debt, hybrid, and equity funds. Your money is invested in government securities and corporate bonds via debt funds. If you are comfortable with modest returns and have a limited tolerance for risk, consider looking at debt funds. Market risk affects the returns, but the important thing is to hold onto your investment for a longer period of time than five, ten, or fifteen years. You can use the significantly high returns you receive to pursue your financial objectives.

Contrarily, equity mutual funds allow you to invest in equities and reap the benefits of capital growth. The risk involved is substantial, and the returns are correlated with changes in the stock market. According to the trend, it is a wise long-term investment choice for periods longer than five years. Ideal for those with a strong tolerance for risk. Investments in tax-saving ELSS funds with a 3-year minimum lock-in period are available.

On the other hand, hybrid funds are the least risky option and are the ideal combination of equities funds and fixed-income instruments. A good place to start for a beginner or novice would be hybrid mutual funds. SIPs are also a great way to invest in mutual funds without taking on market risk. To take advantage of compounding and gradually grow your capital, you can begin investing with as little as Rs. 500.

3. Fixed Term Deposits

One more conventional approach to investing is through Bank Fixed Deposits. You can choose to invest with savings of up to Rs. 1.5 lakh annually by choosing tax-saving bank fixed deposits. Any lock-in term is an option, and after it’s ended, you can take your money out. Since there is no danger involved, the money invested is secure.

Because the returns on bank FDs are larger than those for those under 60, even senior individuals can invest in them. For individuals seeking secure, modest growth in their investments and no equity risk, funds designated as mutual funds are an excellent choice.

4. Unit Linked Investment Plans

ULIPs stand for Unit Linked Investment Plans in their entire form. Because they provide life insurance and wealth building, ULIPs are an excellent choice for investors. Moreover, Section 80C offers tax advantages. Since that is the ULIP plans’ minimum lock-in duration, it is appropriate if you desire to remain invested for more than five years. However, compared to equity-linked savings schemes, the overall risk is larger.

5. Scheme for National Pensions (NPS)

An investing plan with a long-term focus on retirement is the National Pension System (NPS). It allows investors to decide how much of their assets to allocate to government securities, corporate bonds, and stock. NPSG is a useful instrument for accumulating retirement savings since it provides tax advantages and the possibility of large profits.

NPS is an effort by the Indian government to assist citizens in making investments in a variety of market-linked securities, such as debt and stocks. Under section 80C, you can take advantage of tax benefits while saving for the future. Investing in the National Pension Scheme (NPS) is open to all individuals between the ages of 18 and 60. Compared to other equity-related securities, it is a safer investment alternative, and it yields larger returns than PPF.

That being said, the plan starts to take shape when you are sixty. This investment plan is a fantastic choice if you want to put money aside for retirement and live stress-free throughout your golden years. Please keep in mind that the amount of your eventual pension will depend on the returns on your investments.

6. Real Estate Investment

A profitable long-term wealth-building method is real estate investing. Over time, real estate can yield both capital appreciation and rental income while requiring a substantial initial investment and being less liquid than other investment options. Real estate investment trusts (REITs), along with residential and commercial properties, are some choices to think about.

7. Stock Market

Investing directly in individual stocks is an additional strategy for sustaining long-term wealth. To succeed in the stock market, you need to diversify your holdings, do a lot of research, and have a long-term outlook. Although the stock market has historically produced outstanding returns, the risk associated with it is higher than that of other investing options.

To Sum Up:

High-return long-term investment strategies demand discipline, patience, and a well-thought-out plan. Effective long-term wealth growth requires regular investment monitoring, risk evaluation, and diversification. Keep in mind that the world of investing is subject to change, so it’s critical to keep up with the newest trends in the market and investment opportunities. 

For the purpose of generating long-term wealth, you can invest in any of the aforementioned investment plans or schemes. It’s crucial to get financial counsel from a professional before you begin investing so that you can manage your portfolio. To get to a decision, you may always conduct an online search, review market data, examine historical returns, and learn about the experiences of other investors.