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Disclaimer: The website only gives general advice and it is not responsible for any consequences of the action taken by the individual based on such advices.
1. What is Investment? Money you put in various assets, which grows with time and which gives you some returns is called investment. 2. Why to make investment? While you work for money, your money should work for you. If you earn, you survive but when your money earns for you, you prosper! Remember, whatever may be your income today, if you don't invest, you can be nobody in no time! 3. How much to invest? If you want to be as prosperous as the other communities in India, your investments should not be less than the national average. Therefore, your investments should not be less than 30% of your income. Remember, you can never have enough surplus money for making investment and you can always survive whatever may be your income. Therefore, first keep aside your money for investment and manage your household with rest of the amount. 4. Where to Invest? There are various asset classes where you can invest as per your requirement. Physical Assets- Real Estate, Gold, Arts work, etc Financial Assets- Fixed deposits, Public Provident Funds (PPF), National Saving Certificates (NSC), Kisan Vikas Patras (KVP), RBI Bonds, Mutual Funds, Life Insurance Plans, Pension Plans, Corporate Bonds, Corporate Deposits, Government Bonds, Stocks/ Shares, etc.
5. What are the risks to various investments? There can be two categories of risks to your investments. One is the safety of the principal (the amount of money invested by you) and other is the risk of no-earnings or less earnings by your investments. The safety of your money is mostly depends on the types of instruments you have invested in and the issuer of such instruments. The risks of no-earnings and less earnings depends on the market forces and keep on changing. Some of the investments in scale of low to high risks in terms of safety is as under (illustrative) | PPF | NSC | KVP | RBI bonds | Bank FD | MF | Shares | | Low Risk -----------------------------> High Risk | 6. When to invest? Always start investing early, i.e. as soon as you start earning. Remember, if you have earning capacity, you have the investing capacity, whatever little it may be. The most auspicious day of investment is the day you get your wages. 7. What should be tenure of investment? No short term investment gives substantial returns. Minimum time horizon for any investment should be five years period. 8. What should be the investment strategy? Your investment strategy should meet your requirement, depending upon your risk appetite, amount of investible funds, level of your understanding of instruments, your liquidity needs and earning expectations, etc. However, you should diversify sufficiently and don’t put all your eggs in one basket. 9. How to invest? There are thousands of investment avenues in the market and you can get guidance on investment from the issuers, brokers, literatures, etc. on methods of investments in these avenues. For details of some of the most popular investment avenues for salaried class, refer to various segments of this web site. |
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