Top 5 Smart Investments to build wealth and save money
An investment is a type of property. The main objective of this asset is to grow the accumulated funds. The amount accumulated through this investment can be used for many purposes like paying school fees of children, buying a valuable item, paying back interest if borrowed, or in old age upon retirement.
Types
of Investment
1) Stock
2) Bonds
3) Mutual Funds
4) Property
5) Money market fund
Stock
An excellent way to rise wealth is by investing in the stock
market. For long-term investors, stocks are a good investment even during
periods of market instability.
A great way to start investing in the stock market is by depositing
money into an online investment account, which can then be used to buy stocks
or shares of a stock mutual fund. With any broker account you can start
investing for just one share price.
When we need money very much, then we borrow money from someone to
fulfill that need. Then there is an agreement between the person who gives the
money and us. That agreement is called a bond.
The Bonds can be categorized into four types
Corporate Bonds, Municipal Bonds, Government Bonds and
Agency Bonds. When the rate of interest rise the bond prices decrease and
rate of interest decrease, the bond price rises.
Bond is a long term investment instrument and it also gives you
guaranteed returns as compared to investment options.
These provide investors with lower risk options compared to equity's unstable returns. Although equity returns are higher than coupon returns, bonds are more stable against cyclical market fluctuations.
Mutual Fund
There is a fund. The money invested in a mutual fund is
invested by that company in different places and it is tried to give maximum
benefit to the investor.
Lum Sum- In lump sum investment type, investors invest a large sum of money at once. And again and again investors don't put money into it. If you have a large amount of money lying around and you want to invest it in the right place, then
you can invest it in Lump Sum Mutual Fund.
Systematic Investment Plan (SIP)
Systematic SIP is called Systematic Investment Plan.In this type, an investor regularly invests a certain amount in a mutual fund. The investment period can be weekly, monthly or every four months Investment Plan (SIP) is type of SIP is for people who are employed, and who get a monthly salary. Such people can save some money from their salary every month and invest it in mutual funds as an investment.
Property investment is huge business, and,
if done right, can rapidly become highly profitable
An investment property is real estate property purchased with the purpose of earning a return on the investment either through rental income, the future resale of the property, or both. Investment to make will depend on your investment goals, property is one of the best things to invest in.
Money market is a place of financial
transactions in debt instruments with maturity of less than one year with fixed
income.
A money market is a financial market where
short-term financial instruments are traded on a stock exchange.
The temporary short-term loan requirement
of the money market traders is fulfilled.
The money market usually consists of banks,
large financial investment institutions and individual investors. are taking
part.
The money market is traded on both the stock exchanges NSE and BSE in India.
Which
financial tools are traded in the money market?
Treasury Bills
Certificate of Deposit
Cash Management Bills
Commercial Papers
Repurchase Agreement
Call Money
How to Invest
It is important to understand how
to invest. There are some important points to keep in mind before you decide to
invest.
Carefully examine
your financial needs
First, check your financial situation based on how much
risk you can bear, investment goals and make a list of other factors like
family members, number of earning members and your life goals. You can also
seek the help of a financial professional. These will help you clear your
doubts about 'what does investing mean for you?', and identify the right
options.
Diversification of
Investments
Duration
Objectives of
Investment
Before you decide to invest in any one of the many
investment schemes available in India, it is important to understand the
reasons behind it and the implications of investing.
The overall investment objectives can be any of the
following.
To keep money safe
To help grow money
To get a steady stream of income
To reduce the tax burden
Saving for retirement
To meet your financial goals
Why Should You
Invest
Now you may be thinking why to give so much importance to
investment? You can work towards saving more from your earnings. Taking a
portion of your income and saving every month will only create a reserve fund,
which may be insufficient to cover your family in a medical emergency.
On the other hand, you will realize that investing your
money creates wealth and helps you achieve your goals in life.
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