There are expenses related to each investment. Take little care can avoid such money losing investment to get maximum benifit from your investment amount.
Expenses related stock investing1. Brokerage to buy and sell shares online or off-line2. Stock Transaction Tax3. Capital Gain Tax when selling shares within one year of purchase.
Expenses related to Mutual fund
1. Entry Load if going through an agent or authorized broker2. Exit load if not holding the units till a prescribed time
Expenses related to Linked Insurance Plans
1. Premium Allocation Charges2. Policy Administration Charges3. Fund Management Charges4. Various charges would be there depends on company and ULIP instruments.There are expenses and risks related each investments.
Here is some simple steps to avoid such traps.
1. Read and understand the contract with broker to know all the possible expenses2. Ream the Key Information Memorandum prior to investing in mutual funds3. Read the leaflet carefully to know all the expenses related to a Unit Linked Insurance Plan4. Always study the government rules associated with the instruments.5. Always create a list of brokers and compare there services and charges to select a best one among them.6. Before investing mutual fund a list of similar, best performing products available in the market and read the exit load, entry load, minimum holding period of the products.7. If possible, always contact the fund house directly to avoid middle man or agent charges8. Before selecting a Unit Linked Insurance plan, collect the information of similar product available in the market from various insurers and have a comparative study to understand the charge difference to each and select a best one.9. Never invest in stock for short term. You have to pay brokerage, government fixed transaction charges for each time you are buying and selling. If you got little profit by short term holding, remember, this profit will be vanished in the name of capital gain tax.10. There are mutual funds coming with fixed lock in period. Understand the nature of mutual funds in the sense of lock in period or you have to pay huge exit load at the time of redemption. This doesn’t applicable whether you have got a profit or lose.11. ULIP expenses are continuing with policy for very long term. some time these expenses will follow you till the policy term ends. careful action to understand the costs are major requirement to select a proper ULIP.You can contact me to investinternals@gmail.com if have any question or feel that I have missed anything useful here. You can also comment here for the same and I will consider your opinion as soon as possible to make any necessary change in this post. Thanks you fro reading.