There is a belief, “Investing is an attitude”. From the day you receive your first paycheck you should start investing for a wealthy life. Money can solve most of your problems 🙂
However, the daunting questions are what options do I have for investing? I have money but where can I invest and how should I choose investment instruments.
In this article, we will understand all investment options available in India today
List of Investment Options In India
Real Estate
Real Estate is one of the most preferred investment options in India. It simply means you buy an apartment, house or a piece of land with an assumption that the prices will go up and you will either rental income from it or sell it in future at a premium rate.
Features of Real estate
Starting capital requirement: High
Liquidity: Low
Tenure: Long Term
Risk: Moderate
Risk Reward Ratio: Subjective and depends on location
Estimated growth rate: 3% to 5% PA
Real estate is preferred for long term investment
Gold
Gold is the most traditional form of investments. During olden times if there was a war gold was accepted over currency and it was said that gold always retains its intrinsic value hence gold was most preferred during olden times.
Currently, Some communities still prefer gold at preferred investment option, however, gold is might or might not give great returns.
Gold as nature is a good investment if you want to lock down some of your wealth for bad times or gift to your daughter.
Features of gold
Starting capital requirement: Low
Liquidity: High
Tenure: Long Term
Risk: Low
Risk Reward Ratio: Low
Estimated growth rate: NA
Some important features of Gold
– Accepted in all forms across the world
– Slow-moving commodity
– In case of a world crisis, gold can gain value very fast
– Needs a safe storage space to store gold
Fixed Deposit & PPF
Fixed deposit and PPF are moved loved investment options in India because they are risk-free, safe and few are government-backed, However, the drawback is they give low returns and hardly beat inflation.
Fixed deposit and PPFs give returns ranging from 4% to 8% fixed per year and with a specific lock-in period. Generally, low-risk takers prefer to use this instrument or option as their go-to investment.
Features of Fixed Deposit & PPT
Starting capital requirement: Low
Liquidity: High
Tenure: Medium term – Long Term
Risk: Low
Risk Reward Ratio: Low
Estimated growth rate: 4% – 6%
Some important features of FDs and PPFs
– They are the safest option
– Easily available, you do not need to be an expert to do this.
– Low returns but less risky
– Has a lock-in period of 3-5 years.
Direct Equity
Buying and selling of stocks listed on an exchange that is the stock market is what you have been wanting to know. Most risky but an asset class that can make you rich, create wealth for you if rightly done.
People often think all this is betting and risky however it is a skill-based full-time job. Yes, Stock market investment is a full-time job. if you study well and pay attention you can for sure make money in the stock market.
Benefits of investing in stock markets
Starting capital requirement: Low
Liquidity: Low
Tenure: Medium term – Long Term
Risk: High
Risk Reward Ratio: High
Estimated growth rate: 0% – ~Infinite
Mutual funds
Mutual funds have recently been investors favourite after AMFIs “Sahi Hai” awareness Campaign.
If you are not comfortable with investing directly in stocks, yet want to participate in equity markets then, Mutual funds are the best investment option available for you.
In a mutual fund, an Expert fund manager investment money in equity markets on behalf of investors.
Benefits of investing in mutual funds
Starting capital requirement: Low
Liquidity: Low to high
Tenure: Medium term – Long Term
Risk: Moderate
Risk Reward Ratio: High
Estimated growth rate: 10% – 15%
We will keep adding more investment options available in India, if you want information about any specific instrument, do drop a comment and our experts will write about it 🙂