If you still don’t know how to Invest your Money, I got you!
Tired of watching Financial and investment advising videos on social media? Well, I was too. And honestly, I had no idea about it at all. Although, I was interested to finance my money and get the best investment scheme for it, but I was clueless. Perplexed, mystified and puzzled, altogether. So, I read some articles and watched some videos to get an idea about what it really is and what should I do with my money.
Let me explain this to you from scratch because I know some of you reading this could possibly have no idea about it, at all. So, let’s begin from the beginning. In this piece, I am going to tell you the basic idea of what is investment, financing, and will explain everything about shares, mutual funds, real-estate, Fixed-deposits and crypto-currency.
Investment means capital spended to acquire assets and, or financing money to build wealth and save money from the hard earned income. It is basically an additional source of income, or profit over a period of time. Okay, let me explain this to you again.
For example, you buy a small 1 bhk flat and rent it to the tenants. Now, the rent you are earning is your passive income, but the asset (property) acquired is building your wealth. With time, the value of your asset will appreciate and you can enjoy the additional gain and profit. Take another example, Suppose you bought some stocks of any well-known company. With time, the company’s growth will benefit you as well. You can gain profit in the form of dividend and build up your wealth.
Let’s dig into this in detail. In this piece, I will share some basic information and pros-cons for each one of the investment option, that can be considered.
Long-term Investment in shares actually lowers down the risk level and can have chances of good returns. Diversification and good knowledge about the companies is preferential before funding your money into shares. It does have higher liquidity, versatility and also hold a good opportunity of dividend income, capital growth and control over your money. Though risk, uncertainty, and fluctuation in prices leads to a negative interest in them, but a sound knowledge and familiarity about the company’s growth history can get you higher returns.
Mutual Funds are considered to be the best investments in India. People enjoys the benefit of choosing amongst the variety of categories with varying level of risks. It provides expert management over your funds, provides liquidity, and provides safety and transparency. Mutual funds are easy to track and can be accessed effortlessly. It provides simplified portfolio and offers diversification, you can own different assets at one time. They do suffer the drawback of high expense ratios and loaded hidden charges. Anyway, It can be considered amongst the best investment option if you are planning to finance your money.
Real Estate is one of the most popular asset investment around the globe. Ultra-wealthy investors are much interested in real-estate investments, but mediocre people also interest themselves by financing their money in fixed assets. People who are found to be fascinated about the property and assets, are also found to be interested in Gold, land and even, artwork. Investment in Fixed assets are mostly safe, secure and offers higher growth chances as compared to any other form of investment.
4. FIXED DEPOSITS
The utmost reason why people choose Fixed deposits for investing their money is, because it offers assured rate of return and flexible tenures. They have very negligible chances of risk, unless you want to withdraw your money before the tenure period. Fixed deposits are the safest option to invest. Though they are long-term instruments, but offers diversification of portfolio. It can be considered if you want to lock your money for some years, with no-risk and consistent rate of return.
Cryptocurrency is the newest instrument of investment. It is a digital or virtual currency. It has high volatility and potential of huge losses, but at the same time, is also potential for high returns, protects from payment fraud, offers diversification and greater liquidity. Crypto is highly-risky, yet offers high returns. Crypto is highly volatile, fluctuating, and that too at a rapid rate. It is considered to be profitable, and people are extensively interested to invest in it.