VARIOUS INVESTMENT OPTIONS | MANY SOURCES OF MONEY INVESTMENT | INVESTMENTS SHOULD BE MADE IF FUTURE FINANCIAL NEEDS ARE TO BE MET INVESTMENTS ARE ASSETS OR INSTRUMENTS THAT WE CREATE TO GROW OUR MONEY SAFELY INVESTING MEANS TRYING TO MAKE MONEY FROM MONEY

VARIOUS INVESTMENT OPTIONS

 

Many Sources of Money Investment

Investment is an important part of financial planning. If a person wants to increase his wealth, and meet future financial needs, then investment should be done. There are many investment options available in today's modern times.

1. Stocks and Equity:

Investing in shares is a great option for investment. Buying shares can offer high returns, but it also carries risks. Research, analysis, and long-term perspective are essential before investing in the stock market. A Demat account is required for trading in the share market. NSE and BSE are two exchanges in India and more than four thousand stocks are listed here.

2. Restraints:

Bonds are issued by governments, corporations, and municipalities to raise capital. Bonds offer a fixed rate for a specific period, making bonds a more stable investment option than stocks. Bond investments have less risk.

3. Mutual Funds:

Mutual funds are a good option for those who have no knowledge of the stock market. Mutual funds collect money from investors and invest it in stocks, bonds, and other assets. Mutual funds are managed by professional fund managers. There are different types of mutual funds. Which includes index funds, balanced funds, equity funds, and sector funds, each fund has different risks and returns. There are many fund houses in India like SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund and the like.

4. Real Estate:

Real estate investing involves buying property or investing in real estate investment trusts (REITs). By investing in houses, land, and plots you can get good returns in the long term. Only real estate is considered real wealth.

5. Fixed Deposit (FD):

You can deposit money at any bank or post office. It is a type of loan in which a fixed amount is deposited for a fixed time at a predetermined rate of interest. FD is considered to be the safest type of FD.

6. National Pension Scheme (NPS):

In NPS, a person invests money regularly during his working years and gets a corpus after retirement. In old age, a person has no source of income, so investment in NPS is worthless.

6. Gold:

Gold is the traditional form of gold in India. Investment in gold is considered safe. Investors can buy directly from Diagne or Sonachi Naini. Another form of investing in gold is gold ETF exchange-traded funds. A DMAT account is required to invest in Gold ETFs. 1 gold ETF unit is 24 karat gold and 1 gram of silver.

WHAT IS INVESTMENT?

Investments are assets or instruments that we create to grow our money safely. Investing means trying to make money from money.

BASIC RULES OF INVESTING

1. SAFETY

Our first rule of investment is safety i.e. wherever we are going to invest our investment should be safe. Many people join national banks like the State Bank of India, Bank of Maharashtra, etc. They prefer to invest their money in such big banks.

E.g. Opening a savings account in a bank or opening a fixed deposit account and depositing money in a bank account. When you invest money in a bank account, you feel that your money is very safe. Similarly, wherever we invest our hard-earned money, we should prefer to invest it where our money is safe. When your savings are your capital, you can only make a profit on the capital if it survives, you should not lose your capital in the pursuit of higher returns. I would advise you to stay far away from such schemes when there is always much news in newspapers or on TV about people who have fallen victim to such fraudulent schemes that double their money or quadruple their money in a certain day.

2. LIQUIDITY

Liquidity means that we should be able to withdraw our money easily from any instrument in which we are going to invest it. E.g. If you keep your money in a savings account, you can withdraw your money instantly using an ATM, using a cheque. On the other hand, if you invest your money in land, a house, or a flat in short real estate, you will have to work a little harder to get your money back. To get your money back in cash or usable condition, first, you have to find a customer for your land, or flat, make a transaction, and complete the transaction legally and only then you can get your investment back. We always invest for some specific purpose like buying a house, buying a car, emergency, marriage, old age, etc. In such a case, we must have our savings or investment available on time I would like to suggest that you consider

3. REFUND

The third objective of investing is to get a good return on the money you invest. If your money remains as it is, it becomes important to get a good return on your investment when one day your money will remain as a nominal investment or savings in the course of inflation. We can say that earning a return or profit means making money out of money or putting money to work. Although returns are the third step, keep in mind that the return on investment must exceed the rate of inflation. The inflation rate is usually 4% to 5% and if the bank is giving you 3.5%-4% interest on a savings account then you should understand that your investment is losing money.

4. ACCESSIBILITY

It would be better if the method of investing in the instrument that we are going to invest in should be simple i.e. less complicated. Often we ignore an investment tool if it is complicated, so when choosing an investment tool, we should choose an easy tool.

E.g. initially, to open a bank account, one had to go to the bank and submit the documents, but now many people are opening the account as it is possible to open the account online.

If you want to buy a house as an investment, you need to check the documents of the house and also go through the legal process of buying a house.

5. EXPENSES

Apart from the fact that the process of investing should be less expensive, we need to know the costs associated with investing while investing. E.g. while buying a house, there is a huge cost of government tax, stamp duty, broker's charges, documents, etc., and you have to keep a certain amount in your bank account, otherwise, you have to pay a fee. Investing in gold incurs labor costs for goldsmiths, capturing gold depreciation, or requiring bank lockers to keep gold safe. While investing in this way, I think it is important to consider the costs involved in starting up, running, and winding down the investment.

6. TIME

The time required to invest should be short. Nowadays, with the internet and smartphones in everyone's hands, the investment process can be completed in a very short time. You have various investment options like a bank account, gold, land, shares, etc.

E.g. investing in real estate is a bit time-consuming, it is easier to invest in gold, and easiest to invest in the stock market and bank.

INVESTMENT INSTRUMENTS

1. BANK ACCOUNT: Savings Account, Fixed Deposit Account, Recurring Deposit Account etc

2. REAL ESTATE: Land, Plot, House, Flat etc

3. PRECIOUS METALS: Gold, Silver.

4. BONDS

5. SHARES

INVESTMENT IN SHARES

Now we are going to look at investing in shares based on our investment criteria.

1. SAFETY

If we look at the history of the stock market, we understand that the seed of the stock market was sown in the thirteenth century itself. India has the oldest stock market in Asia. When the Bombay Stock Exchange has a history of 150 years, there is no reason to think that investing in the stock market is risky. If you study the stock market properly and invest money, your money can definitely be safe.

Apart from this, SEBI (Securities and Exchange Board of India) to supervise the stock market has made and is making many provisions to protect the small investors.

2. LIQUIDITY

Currently, we can use many online broker platforms like Zerodha to invest in shares and after selling shares we can get our money from the trading account to a bank account within 2 days. Since stock market investments are stored in Demat accounts, it is easy to reduce investments.

3. REFUND

By investing in the stock market we can make huge wealth and there are many examples of making wealth from the stock market. Warren Buffett, a world-famous investor and one of the richest people on the list, is a good example of the benefits of investing in the stock market. Many investors who have accumulated huge fortunes by working in the Indian stock market are famous like Rakesh Jhunjhunwala, Radhakisan Damani, and Ramesh Damani etc. You must have heard the example of Infosys Company. The share of Infosys Company entered the market in 1993 for Rs 95 and at that time only 100 shares had become millionaires.

4. ACCESSIBILITY

If the internet and mobile phones are available, we can work in the stock market from any corner of the world. We can invest crores in one click and reduce the investment in one click. Working in the stock market is very easy once you get good knowledge and practice.

5. EXPENSES

Investing in the stock market has become much cheaper since the advent of discount brokers. If you are doing intraday trading then you have to pay a maximum brokerage of only Rs.20 per trade. From this, we realize that investing or trading in the stock market is available at a modest cost.

6. TIME

To work in the stock market, we can open an account from our mobile phone at home and start working immediately. To work in the stock market you need a demat account and trading a Count is needed. We have already seen in the previous article what is demat account and trading account are. I have also told you that trading in the stock market takes very little time.

SUMMARY

Investments are assets or instruments that we create to grow our money safely. Investing means trying to make money from money. Our first rule of investment is safety i.e. wherever we are going to invest our investment should be safe. We should be able to withdraw our money very easily from the instruments in which we are going to invest our money. It is important to get a good return on your investment.

Please be aware

All the information in the above article is collected from various websites through the internet. According to the subject, this information has been presented to you with necessary modifications. The Compiler does not take any responsibility for its authenticity and cannot guarantee 100% about the points and information presented therein. Readers are requested to enjoy reading.