Money Saving Investment Options

Priyanka Sharma

14 Sep 2017

Untitled Document

Savings are the essence of a financially secure future. The higher the savings, the lower is the risk of a financial burden in the future. However, just saving money and crediting it in your savings account will only lead to "piling cash" and nothing more. Saving is the first and the most important step towards achieving your financial goals, but it is not the only step.

Investing is equally important to a financial plan. You can never achieve a financially secure future by just piling cash. The best thing to do with your savings is to invest them at a place which will yield you considerable profits and repeat this step until you achieve your desired goals. There are many places you can invest your savings to earn a healthy return on your investments

 

Initial public offering

IPO or initial public offering is a method used by private companies to raise money through public investment. They offer their shares to the common public in return for their money. It is the very first sale of stocks by a private company so that it can become a publicly traded company in the market.

As it is the first sale of the shares of a company, the share price of the IPO is low compared to the share price of publicly traded companies trading in the market. Investing in the IPO of a company having the potential to grow in the future is one of the reliable ways to grow your capital in the beginning. It requires low capital investment from your side which further lowers the risk of a huge loss and can prove to be the first positive steps towards achieving your financial goals.

Stocks and shares

As scary as people have made the market to sound, investing in the secondary market is estimated to be one of the best things you can do with your savings to grow your capital multifold. When trading in the stock market, you buy shares of a publicly traded company for an extended period with the view of selling them in the market when they reach a price which is higher than the amount you paid for them.

It is true that trading in the share market is risky as you can lose all of your money. But undertaking this risk can result in huge profits. The share market runs on a simple rule of thumb- higher the risk, higher the potential reward. It is the share market where you should be trading if you are willing to take an enormous amount of risk to make a huge amount of profits.

Insurance policies

Life is full of certain contingencies and unfortunate events. While you would think that you have the next 30 or 40 years to plan for your future, there is a fair possibility that you can meet with an unfortunate event before even achieving your desired financial goals.

Investing in a health insurance plan will enable you to protect your family financially in the event of an eventuality. It provides the policyholder or the next of kin, a lump sum amount in case of the death of the policyholder. The best thing about a health insurance which makes it a fine investment option is its ability to also provide the lump sum amount, not only at the time of death but also on the date of the maturity of the policy.

Mutual funds

Most people don't have the time and savings to invest in IPOs and share market. It requires a keen understanding and constant research about both the market and the companies. Most people having a job and less amount of time prefer not to invest in the share market. 

A systematic investment plan is an investment strategy where a person invests the same sum of money periodically in a particular mutual fund. It is possible to invest a sum as low as Rs 500 per month which is automatically debited from your bank amount every month, and Rs 500 worth of units of that fund are credited in your mutual fund account. Additional units of the funds are credited every time you further invest money in this strategy. Mutual funds are believed to be the most optimum for working professionals who can't give a significant amount of time towards investing money. Without constantly have to worry about the market trends, you are provided an opportunity to grow your savings systematically.

Have Referral Code?

Similar articles

  • Responses
  • Patidar Samaj

    - 2 hrs ago

    This article claims RJio was given a "Backdoor Entry" into the 4G Based Voice Routing. The peculiar aspect is without the Voice License, Rjio would have been a mere ISP. With the license, it is now a holistic communications service provider, with ability to exponentially scale the bouquet of products. The events indicate it was meticulously planned way before the auctions because the auctions were clear on the agenda: 4G for internet only.

Load More
mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


Banner

Money Saving Investment Options

Priyanka Sharma

14 Sep 2017

Untitled Document

Savings are the essence of a financially secure future. The higher the savings, the lower is the risk of a financial burden in the future. However, just saving money and crediting it in your savings account will only lead to "piling cash" and nothing more. Saving is the first and the most important step towards achieving your financial goals, but it is not the only step.

Investing is equally important to a financial plan. You can never achieve a financially secure future by just piling cash. The best thing to do with your savings is to invest them at a place which will yield you considerable profits and repeat this step until you achieve your desired goals. There are many places you can invest your savings to earn a healthy return on your investments

 

Initial public offering

IPO or initial public offering is a method used by private companies to raise money through public investment. They offer their shares to the common public in return for their money. It is the very first sale of stocks by a private company so that it can become a publicly traded company in the market.

As it is the first sale of the shares of a company, the share price of the IPO is low compared to the share price of publicly traded companies trading in the market. Investing in the IPO of a company having the potential to grow in the future is one of the reliable ways to grow your capital in the beginning. It requires low capital investment from your side which further lowers the risk of a huge loss and can prove to be the first positive steps towards achieving your financial goals.

Stocks and shares

As scary as people have made the market to sound, investing in the secondary market is estimated to be one of the best things you can do with your savings to grow your capital multifold. When trading in the stock market, you buy shares of a publicly traded company for an extended period with the view of selling them in the market when they reach a price which is higher than the amount you paid for them.

It is true that trading in the share market is risky as you can lose all of your money. But undertaking this risk can result in huge profits. The share market runs on a simple rule of thumb- higher the risk, higher the potential reward. It is the share market where you should be trading if you are willing to take an enormous amount of risk to make a huge amount of profits.

Insurance policies

Life is full of certain contingencies and unfortunate events. While you would think that you have the next 30 or 40 years to plan for your future, there is a fair possibility that you can meet with an unfortunate event before even achieving your desired financial goals.

Investing in a health insurance plan will enable you to protect your family financially in the event of an eventuality. It provides the policyholder or the next of kin, a lump sum amount in case of the death of the policyholder. The best thing about a health insurance which makes it a fine investment option is its ability to also provide the lump sum amount, not only at the time of death but also on the date of the maturity of the policy.

Mutual funds

Most people don't have the time and savings to invest in IPOs and share market. It requires a keen understanding and constant research about both the market and the companies. Most people having a job and less amount of time prefer not to invest in the share market. 

A systematic investment plan is an investment strategy where a person invests the same sum of money periodically in a particular mutual fund. It is possible to invest a sum as low as Rs 500 per month which is automatically debited from your bank amount every month, and Rs 500 worth of units of that fund are credited in your mutual fund account. Additional units of the funds are credited every time you further invest money in this strategy. Mutual funds are believed to be the most optimum for working professionals who can't give a significant amount of time towards investing money. Without constantly have to worry about the market trends, you are provided an opportunity to grow your savings systematically.

Have Referral Code?