- Real Estate.
- Arts and Antiques.
- Commodities (Gold / Silver / Other Precious Metals).
Now a day’s most of the investment class possess electronic existence assets to benefit investors. There is not necessary to buy assets in physical existence if electronic form is available.
- 0.1 “Five Best Ways to Invest your Money” are shown below:
- 0.2 1. Debts / Government bonds / Fixed Income Deposits:
- 0.3 2. Stock Market / Mutual Funds:
- 0.4 3. Real Estate Investment:
- 0.5 4. Commodities (Gold / Silver / Other Precious Metals):
- 0.6 5. Arts and Antiques:
- 0.7 Insurance is Not Investment Class:
- 0.8 Conclusion:
- 1 Basics of Investing for Beginners
“Five Best Ways to Invest your Money” are shown below:
If you are a beginner you can start with investing little money and then once you understand how it works you can increase your investment.
1. Debts / Government bonds / Fixed Income Deposits:
Debts / Government bonds / Fixed income deposits rewards fixed income on your invested amount year on year. This type of asset class also involves little risk but gradually with increase in knowledge you can find the risk free ways to invest your money. There is always a marginal risk involve in any type investment since we have noticed in past years that government too are filing bankruptcy. But in general belief, debts or Government bonds or fixed income investments can achieve you returns between 5-9%. When you compare the returns with growing inflation rates it may feel as not best investment option. So it is recommended that you should only invest small fraction of your investment into government bonds or debts or corporate bonds or Fixed income deposits as a part of your diversified investment plan to minimize risk on your portfolio hit.
2. Stock Market / Mutual Funds:
At a beginner you may find this asset class involves little risk when compared with other investment options. As and when you get more knowledge on it you can gradually develop way to invest risk free into stock market or mutual funds as well. Indian markets are way more ahead in returns when compared with other world markets. Generally it is understood that stock market or mutual fund investment can assist you to reach 20-25% returns averagely in long run. For example: Consider any stock may be Infosys / Lupin / Asian Paints / Tata Motors / Sun Pharma / ITC / TCS and compare the price traded a decade back with current price. You will get fair idea of returns you can expect from this type of investment class.
3. Real Estate Investment:
If you have a huge amount picked for investment then investing in real estate may be good option for you. This type of asset class are categorised as low risk with high returns investment. If you are planning to invest in real estate you can expect to get around 10-15% capital appreciation year after year. If you dont know about trading or other investment then this is the best ways to invest your money. Most popular disadvantage of real estate investments are:
- It takes months or sometime years to convert investment back into cash / liquid form.
- Minimum investment amount is huge and if you are planning to invest via home loan then your return on investment will decrease and may not look attractive any more.
4. Commodities (Gold / Silver / Other Precious Metals):
Generally it is observed that whenever stock market falls, price of the precious metal rises and vice versa this is because of shift of investment from one class to another class. One should also consider investment into precious metals as well in order to diversify investment and to reduce volatility and risk on portfolio hits. Most popular advantage of investing in gold or silver or any precious metal is that they can be converted into liquid or cash form very easily and quickly (mostly in 1 day time frame) than any other asset class. It is noticed that stock / mutual funds takes 2-3 days whereas fixed deposits, bonds takes 3-6 days to get converted into cash or liquid form.
5. Arts and Antiques:
Earlier days investing in these assets class was not considered as investment options. This is a unique kind of investment class getting popular these days. If you are a business man or high net worth individual possess guts to invest in start-up firms or start-up artists or financing to expand corporate firms, etc you can expect returns growing with the pace of 25-40% year after year. One should be good at forecasting, forecasting future trends, forecasting future opportunities to be Art and Antiques investor. This art and antiques markets are highly risky and let us see some of the disadvantages of investing in Art and Antiques investor are:
- There are no standard valuation methods or principle defined is always based on subjective.
- Investing require full transparency and lack in rules and regulation.
- Converting investment into liquid / cash is forever doubtful.
- Benefits on such investment class cannot be pledged / promised.
- Investment requires space for start-ups or storing artist unique work
Insurance is Not Investment Class:
There are general believed from decades in most part of the world that insurance is also a part of an investment assets. Now a day’s there are varieties of insurance options are available. For example: Insurance cum Investment. Insurance policy is a contract agreement between insurance company and insured person to compensate losses under occurrence of unexpected events. Under financial planning investing in such assets options are not considered as investment since goal of investment defers from goal of insurance. In simple words, Investment and Insurance are two sides of coin under financial planning. This wrong belief from decades needs to be corrected.
In this guide we have learned about various differnt ways to invest your money. After this tutorial you should be able to draft high level road map for your investment options. 22nd Principal of financial planning says ‘diversify your investment’. It is always recommendable to diversify your investment into different asset class as a part of proper investment plan. Under proper investment plan, you should create a balanced diversified portfolio based on the risk and returns you are hopping as a plan of your long term financial planning goal.
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Basics of Investing for Beginners
- Chapter 1: What is Investment and its objectives?
- Chapter 2: Why is Investment important for Economic growth?
- Currently Reading: Ways to Invest your Money and Make Profit
- Chapter 4: Best Investment Opportunities for your Retirement Income
- Chapter 5: What are the Legal Matters you should know before Investing?
- Chapter 6: Different Types of Investment Risks Involved in Investing
- Chapter 7: When and How to Invest in Stocks?
- Chapter 8: How Positive Attitude can improve your Investing mindset?
- Chapter 9: Should you Borrow Money to Invest in Stock Markets or Funds
- Chapter 10: 5 Rules of Thumb - To be consider before making Investments
- Chapter 11: How to Calculate Stock Market Returns and Break Even Point?
- Chapter 12: How to Calculate Compound Interest and Simple Interest?
- Chapter 13: Rule of 72, 114 and 144 of Compounding Interest formula
- Chapter 14: What is the Difference between Trading, Investment and Speculation?
- Chapter 15: How to become a Smart Investor or a Successful Investor
- Chapter 16: Tutorial Quiz – Basics of Investing for Beginners Module
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