What will you do once you reach the age where getting shouting from bosses doesn’t seem right, the exhaustion reaches not only mentally but physically too, what will your income sources be once you think of quitting everything to sit ideally at home and enjoying the peace. Well don’t worry if you did not think this through and even if you did, you haven’t got the answers too. We will guide you through all the steps that are available in the market for you where the investment today will get you to comfort in the future. This blog is to help you understand the best investment plans for beginners.
Before moving onto to the options, let’s evaluate the types of investments we shall be covering.
Types of Investments
LOW-RISK INVESTMENT: These are the instruments which will pay your fixed income, irrespective of the economic changes. Bonds, debentures, shares are all collected this umbrella. Also provident fund, EPF, National savings scheme.
MEDIUM RISK INVESTMENT: these kind of investments carry a certain amount of risk with them but have the capability to pay higher returns. So investors who want to have the ability to invest in this kind of investment should do it. Debt funds, balanced funds, and index funds come under this category.
HIGH-RISK INVESTMENTS: These investments carry an uncertainty with them, they can give higher returns but the chances of losses are equal. The quantity and the timing of these kinds of investments are not fixed as they are affected by external factors.
Now that we have evaluated the levels of risk investments, you can categorize yourself into any of the above in respect to your risk level and ability to invest. Once you have now figured out which level you belong to, let us look at the options for investments for you.
1- MUTUAL FUNDS:
Mutual funds are a company that collects money from various investors and invests in other types of investments which could be shares, bonds, etc. For every share, an investor buys in that mutual fund, shows the part of his ownership in that company. One of the advantages of a mutual fund is that it allows you to capture the returns of an entire segment of the market without having to financially transact (buy or sell) the shares and bonds.
This is one of the most used platforms of investment by everyone. It is one of the easiest platforms for the beginners and the naïve. These provide a small amount of ownership at the time of purchasing. You also get to vote in the major company decisions. You can trade stocks in the share or stock market. It is a very addictive platform.
PPF (public provident fund) is one of the most common and trusted areas of investment. This requires a minimum investment of Rs.500/- annually and you receive the interest annually. It has a lifetime of 15 years but allows withdrawal on certain conditions. It is a highly obtained long term investment plan.
NPS (National Pension Scheme): A platform that allows us to plan our retirement because even after reaching the nonworking age, you will still have to manage your expenses. To address this concern of the growing senior citizen demography of this country, the government came out with NPS. In here, the individual starts accumulating money under this scheme from an early age. 40% of this accumulation goes to his benefits and the rest is provided to him in a lump sum upon retirement.
5- FIXED DEPOSITS:
These are the safest and the lowest risk bearer of all. It provides you with the option of saving any amount for a flexible time period. These can be beneficial for both short and long term periods. They are provided by banks and nonbanking financial companies.