Tuesday, September 27, 2016

Conversations between PPF and ELSS

PPF: I am more powerful than you.

ELSS: Why?

PPF:

1. I hold my investors for 15 yrs. They can’t leave me before that.

2. Once they choose me, they have to contribute something every year. Else I deactivate them.

3. They can’t touch me even if they are in urgent need of money.

4. I give guaranteed return. I am not volatile like you.

5. I have government backing.

ELSS:

I may not be powerful like you but I am helpful to my investors.

1. I don’t want to forcefully hold them. If they are not comfortable with me, they can leave after 3 yrs.

2. I don’t ask them for mandatory contribution and I don’t deactivate them.

3. As I told they can touch me any time after 3 yrs.

4. Your return is also volatile which changes every year. I know I am volatile but I provide them a tool (SIP) to get benefit from my volatility and I help them to beat inflation to create wealth.

5. Off course you have a backing of government but even govt too may not able to maintain your attractiveness in the falling interest regime . That is why you are at 8.1% now from 12%.

Check the Reality Govt. Backing instrument Create wealth or Equity Market base volatile instrument

If anyone invested Rs. 1,00,000 Every Year. since 29th March 1996 in both above mention instruments Total investment would be 21,00,000

Valuation as on 31 Aug 2016

PPF= 55,20,997
ELSS = BSL TAX RELIEF 96= 4,13,26,784

PPF= 2.62 Times
ELSS = BSL TAX RELIEF 96= 19.67

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