The Basics of Saving: Investing in the Right Places

You must have read about millionaires all over the world, in articles, in magazines, and on the internet. Do you often wonder how they accumulated their wealth? Well, the answer to that is ‘investment’.

The world of finance is extremely intimidating and complicated, and not everyone can grasp its fundamentals. But, at the same time, learning about stock markets, Mutual Funds, and other sources of investments isn’t as complicated once you get acclimated to its concepts and lingo.

Irrespective of your interests, lifestyle, or personality, investing your money in the right place is always a clever idea. This article will give you a brick-by-brick insight to the investing world, and the strategies you can apply while investing your money.

Investing in Fixed Deposits

Traditionally, a Fixed Deposit is considered to be the safest place to put your money. With a Fixed Deposit, you can hand over your money to a bank or NBFC, for a time period ranging from 7 days to 10 years. And, once your money is with the bank, it starts gaining interest, depending on the Fixed Deposit rate decided upon by the bank or NBFC.

After the deposit tenure is over, the bank returns your money, along with the whole sum of interest earned. Fixed Deposits also come with beneficial interest rates to senior citizens, no limit on the principal investment, and tax benefits if the deposit is made under a tax saving scheme. All these features, together, make a Fixed Deposit the leading favorite among Indian investors.

Also, you can easily calculate the time period of your maturity on the internet, with using Bajaj Finserv Fixed Deposit Calculator.

Investing in the stock market

Buying a company’s shares makes you a part owner of the company. If you buy equity shares of a company, you’re also eligible to vote at its shareholder’s meeting, and entitled to receive a portion of the profits that the company makes. These portions are known as ‘dividends’.

But since the stock market is extremely volatile, you cannot always predict which direction it will go on a day-to-day basis. There is no guarantee on returns when you’re investing in the stock market, which is what makes this option a high-risk one. Some companies won’t pay its shareholders’ dividends unless a certain percentage of profits is earned, making it crucial for the company to yield good results.

That being said, usually the only way through which you can gain money easily is to wait for the stocks you’ve bought to see an increase its value in the market before you sell them.

Investing in bonds

Securities that are found on debt are famous as ‘bonds’. When you purchase a company’s bond, you’re basically lending the company your money. The company pays off this loan by giving you interest on your money, eventually paying back the whole amount.

The safety of investment that a bond offers is much better than that of the stocks and shares. If you purchase bonds from a company with a stable revenue, your investment can be considered risk-free. But, things aren’t as simple as they look. Since, the risk involve in bonds is less, its returns are lower as well.

Investing in Mutual Funds

Mutual Funds are a collection of bonds and stocks. When you invest in Mutual Funds, your money gets accumulate with several other investors’ money and invest in different securities. Mutual Funds are create with a clear-cut interest in mind, and their targets could vary from small stocks to large, overseas stocks.

It is advisable to let professionals handle the finances when it comes to Mutual Funds. They will help guide you on which investment options to choose, and which one to avoid. Also, if you’re a first-time buyer, you will find it easy to invest your money in one as it doesn’t require a keen market sense or experience.

Explore other modes too

There are several other domains you can consider investing your money in, like forex, gold, and real estate.

  • Forex

The foreign exchange market is the world’s largest financial market. It comprises of corporates, banks, hedge funds, investment firms, and retail investors. There are many ways through which you can invest in forex like foreign currency futures, foreign currency options, exchange traded funds, foreign bond funds, and certificates of deposits.

  • Gold

Investing in gold can reap you better returns in the long run. There are many ways to invest in gold like buying bars and coins, gold accounts, exchange-traded funds, and gold mining stocks.

  • Real estate

Real estate offers a plethora of opportunities to invest your money in. Buying a home gives you access to a tangible asset, while at the same time giving you a sense of security. And, once you hang up your boots, it can be a place for you to retire in style.

Always go for the option that suits you the best, because one-size doesn’t fit all. Whenever you go in for an investment, make sure you have a long-term approach in mind. At the same time, you should be prepare for the risks that are involve in any investment, large or small.

There are many options available for you to invest your money in. Explore all your possibilities, and zero-in on the investment model that is in your best interests.

Leave a Reply

Your email address will not be published. Required fields are marked *