What, Why, and Where of Investment
Investment in today’s world requires attention and more importantly knowledge about it. Here’s an article to explain to you the what, why, and where of investment.
Do you also wonder how to answer the what, why, and where of investment? Well, you get a tailor-made article answering your question wholeheartedly.
Finance decisions can be hard on you and your pocket as well. Spending without regard keeps you living from paycheck to paycheck. The devotion of your salaries to expenses does not seem good in the long run, and also when you need some money for an emergency, probably health-related. This is why you need to invest. To invest, you need to know what, why, and where of investment i.e., what is an investment, why investment is important, and where to invest money in India.
What is an investment?
It is always up to the curiosity of a person that they ask you what is an investment. Let me give you the most relevant answer to the question - Investment means to put your money into something that would eventually, after a period of time, give you satisfactory returns from it.
Did you get that? Putting in layman terms, it is the process when you put (invest) your money with the belief of getting a profit (return) out of it. In an ordinary person’s life, the investment would sound as - a group of women getting together, starting a chit fund, putting a definite amount for a definite span of months (in a year, obviously), and at the end, the collected amount is given to the person who wins through a lottery system. Lucky!
Why investment is important?
There is no single reason that you’d be able to give the curious person when they ask why investment is important. The list includes all these -
1. You would get a return from your investment leading you to fulfill your goals.
2. Keeping a little money saved for yourself, for the time you stay alone, is never bad.
3. To save and invest your savings too as time passes, so that you would not have to be dependent on someone else to provide for you.
4. You can be the king of your own finances, by building your finances, by reinvesting your profit (return) in either the same or some other policy.
Where to invest?
Now this question would gather a very interesting answer, for there are different sub-options under so many options under where to invest money in India.
1. Mutual Funds: There are three types of funds available to you under this - Equity, Debt, and Hybrid. While Equity covers investment in stocks and Debt in bonds, you know that Hybrid provides both.
2. Cryptocurrency: Crypto is a digital currency, impossible to be forged, and a possible medium of exchange in the near future. The famous apps that help you in this investment include CoinDCX and Unocoin.
3. Real Estate: People invest their money in purchasing real estate properties, where the major profit remains when you put the property on rent.
4. Direct Equity: Apart from investing in equity under mutual funds, you can even invest in direct equity (stocks) directly. You would have complete control of your stocks and perpetual investments as well.
5. National Pension System: This plan is beneficial for anyone who wishes to plan for their retirement. You have to allocate 10% of salary and DA, and if any amount you wish to invest.
6. PPF: Public Provident Fund (PPF) has a lock-in period of 5 years with quarterly revision of the interest rate by the Government of India (GoI). There is a fixed rate of return, which makes it much more approachable.
7. Fixed Deposits: Fixed Deposits or FDs, as popularly known, guarantee returns and safety of a fixed amount for the amount that you have invested. When the time for your policy ends, you receive the amount invested and the compound interest as well.
Investment isn’t a child’s play, so knowing the answers to every query of yours is important. In this article, we have covered every promised question - you’d see what investment actually is, the reasons you need to invest, and where you need to invest in India. We hope that you can find everything beneficial here.