Investment Planning

Investment Planning ideas.

Today I am going to discuss a very serious topic in finance i.e. Investment Planning. Investment planning has remained on the top of everyone’s priority list in recent years.But are you really prepared for this right now?A survey has shown that in India majority of the Indians do not know the difference between savings & investment.Keeping idle money in bank account is considered as investment in banks.This is a bit astonishing to me.Therefore, I have come up today to make this bit simple and easy to understand.

I personally believe that “it’s not important how much you are earning ,it’s more important that how much your hard earned money is earning.” You are earning in your own capacity and meeting your livelihoods.But what about your future.Are you investing enough to make your future as hassle free as now?To many of you the answer is probably not.In current scenario most of the people think purchase of Real Estate properties like lands,flats,buildings,houses and etc. as investment.They never consider investment in any other avenues as investments.As a result of this they are just becoming “Asset rich” & “Cash poor”. There is no problem whatsoever if anyone purchase a residential property for own accommodation. But the problem arises right away when they consider real estate as an investment and have to shred a lot of sweat to sell their property in right price in due time due to its poor liquidity nature.Though, the average last 5 years’s Return On Investment(R.O.I) from property in India is not very eye catching and is just merely 9% approax.Yet, currently Government is coming up with new different schemes for common people under the banner housing for all by 2022.

Various investment options in India: Before, any further discussions on this topic,you must know that investment in any avenue depends on various factors such as risk profile of the individual,age of the individual,purpose of investment,any financial goals linked to the investment i.e. investment objectives and many more. One sound investment pattern for an individual may not necessarily work for other.It should be perceived as a unique one for different individuals.

Investment avenues: I have categorised investment into two categories based on time horizon such as Short term & Long term.

Short term investments: I am only mentioning the different investment options and not going into details.It will be discussed separately later on.

  • Savings Bank account:For ultra short duration to meet urgent needs;
  • Money market fund or Liquid Mutual Fund: Can be used as emergency needs.Beneficial due to capital protection and appreciation;
  • Bank Fixed Deposits: Ideally, for short term goals ranging between 6 to 12 months;

Long term investments: I am only mentioning the different investment options and not going into details.It will be discussed separately later on.

  • Equity Mutual funds;
  • Debt Mutual funds;
  • Public Provident Fund,
  • National Saving Certificate,
  • Post office savings scheme,
  • Life Insurance policies,
  • Company Fixed deposits;
  • Stocks or Shares,
  • Bonds & Debentures.

Therefore, planning for investment must be in place for all.Only this systematic approach can lead towards accomplishing your financial goals.

(Item wise detailed discussions on above mentioned topics will be done later on.)

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