Everyone wants to grow your money. But before getting on the ‘how to’, let’s ponder on the very basic question - what is it to be rich? Is it driving a BMW or dining at high end restaurants or setting off on luxurious cruises? Well, these are just icing on the cake; to be really rich is to accumulate enough money to ensure a secure financial future.Read more
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Indian economy is just getting started - currently at $2.8 trillion.
Invest in India’s growth story and create wealth over long term
China took 5 Years to go from 2 Trillion to 5 Trillions (2004-2009)
Hang Seng went from 8500 to 32000
USA took 11 years to go from 2 Trillion to 5 Trillions (1977-1988)
Dow Jones went from 700 to 12000
Japan took 8.5 Years to go from 2 Trillion to 5 Trillions (1978-1986)
Japanese stock went from 2000 to 37000
Coming to the meat, how can we get rich? Have you ever thought what is it that rich people have in common? It is their attitude towards money and a bit of luck of course. Rich people invest with a long term perspective and do not get deterred by the momentary turns and tumbles. We have come up with 8 of the best ways one can grow his money to its full potential.
For many people, debt is like marsh. They try to get out of their present debts by taking more debts sinking in the financial troubles deeper and deeper. Eventually it’s the habit that matters. Develop a habit that no matter what, you’ll take no more debt. For most of us, it’s probably the biggest barrier to getting rich.
If you are planning to invest, put two things on priority –
Pay off your debts from the petty credit card due payments to humongous loans
Vow to develop the habit of not taking the debt until it is way too necessary
Do not even think of investing until you get that heavy bag of debt off your shoulder. Once you are free of your debt, you should work on piling up liquid cash to suffice for your immediate expenses. Only subsequent to that, you will be up and ready to make an investment. In this way you can grow your money without any debt.
A moody person can be a good lover but not a good investor. There’s nothing like the vices of over investment and under investment. For most of us it works like this - we get all excited about a particular investment, put our goals and dreams in it and without giving it enough time to grow, pull our hands off it. It is human tendency to start something very aggressively and quitting within a few months, be it taking up exercises, learning a new language or investing. But in case of investments this habit results in a direct loss of money. If you wish to grow your money then you need to avoid such habits.
The reason why money grows by staying consistent towards an investment is the effect known as ‘rupee cost averaging’. Simply put, it refers to averaging of the short term ups and downs of the market in long term. It is because of rupee cost averaging that consistent investors get to enjoy decent returns in spite of market turbulence.
Never be religious about any specific investment. Rather, be open to a range of investment plans at once. In investment terminology, it is better known as diversification. Simply put, it advices the investor to put his money across diverse options such as real estate, bonds, stocks and commodities. This is one of the best ways to grow your money by thinning out the chances of being at complete loss if one investment turns out to be a failure as you would still have other options to count on.
As one ages, the perspectives and priorities change. A regular guy in his 20s doesn’t even think beyond which tees to wear, which car to drive and how to impress women. These questions however become irrelevant to the guy in his 40s.
Your financial needs change with age and so should your investments. In your younger years in order to grow your money, you can think of putting your money in high-risk-high-return investments but as you grow older, it’s better to adopt a conservative approach and preserve what you have painstakingly earned and gained through your previous years. On a literal note, it means shifting from equity oriented funds to debt oriented funds.
Banyan trees don’t grow to their full potential in one day. It takes time. And so is with investments. The sooner you start investing, the more time the investment gets for hatching, and the better become the chances of money growth. In a sense, investing is something that you should always have started a bit earlier to grow your money.
Suppose your financial goal is to retire early at 55 with a fortune to spend on yourself. Let’s go a step further and assume that you fix your target savings at Rs 50 lakh. Now it is obvious to see that you need to shell out a smaller chunk every month if you start investing at the age of 25 rather than 35 to grow your money.
The secret to why does starting early always works lies in the power of compounding. Compounding leads to an exponential growth of your money and its effect increases as the investment tenure increases. The thumb rule is, the earlier you start, the better grows the money.
Do not get enchanted by the blingy investment advertisements. Use your own insight and discretion while making your choice of investment.
Always turn to investments suiting your appetite
Never put your money in investments that you do not understand
Do not invest more than you can put at stake
If you are the kind who wouldn’t want to let the stock market fluctuations eat away your hard earned savings, then you should adopt a conservative mode of investment. On the other hand, if you happen to be a crackerjack in riding the lows and highs of market and making the most of it, then stock market is your thing.
Try to make the best of investments by putting your money in tax saving investments such as National Pension Scheme (NPS), provident fund, ELSS mutual funds and so forth.
No one learns swimming without stepping into water. So if you want to grow your money and become rich, you too have to put your fear aside and start investing.
Putting nothing to risk might be like putting everything to risk. Many people think that saving the money is same as investment. It’s not! If you choose to keep your money safe in a savings scheme rather than investing it somewhere, you might end up getting outrun by inflation and losing the value of your money.
If you’re a little dicey about your own financial goals and priorities, you better take professional help or consult to someone close who’s good with numbers and who has set an example of making money with wise investments. Let a financial advisor take a look into your finances and suggest investments that suits your needs and appetite. It might help you figure out an investment strategy.
The rapid pick-up pace of Indian markets post-pandemic has not missed the investors’ eye, in India and abroad alike. Scaling new heights every day, the economy has victoriously clamped down on COVID-induced market volatility and emerged sturdier than some of the developed countries. The economy fares rather well even if we zoom out and look at the bigger picture - India has demonstrated tremendous growth over the past two decades and now is a great time to reap benefits by investing in the markets here.
When it comes to NRI investment in India, the reasons and options are both in abundance. A steady rise in FDI (foreign direct investment) inflows and government-led efforts make India conducive for investment. As per the ministry of commerce and industry, the total FDI during the first four months of this fiscal year grew by 62%. If you have set your eyes to invest in this promising growth, make sure you punctuate your financial portfolio with the right investment options.
Even for those looking for assured returns the Indian Market today is Well poised to enable investment plans that offer Excellent Guaranteed Returns that one can lockin today for an many as 45 Years
Let’s closely analyse these options to help you choose the best investment plan.
In recent years, ULIPs have garnered a lot of attention from NRIs and are emerging as a popular investment choice. The ULIPs are a unique blend of investment and insurance components. The premium paid by the customer is divided into life cover and equity investment. The plans generally carry a minimum of 5 year lock-in period and the policyholder can even switch between the funds during the policy period.
What makes these plans popular is that the mortality charges are returned to the customer upon maturity. Mortality charges are levied by the insurer to cover the risk of death in investment plans. If you invest your money for 15-20 years, you stand to gain returns as high as 12-15%. Besides, you can always avail tax benefits on these plans.
When it comes to savings, the preferred option for most households used to be FDs. However, this is changing now due to falling interest rates on FDs. The average returns that FDs offer is a taxable 5% interest rate. When compared to the inflation rate of 5.3% pegged by RBI, FDs are not just offering less returns but in fact, fetching real negative interest. The better alternative here is to invest in guaranteed return plans.
These are savings cum investment plans that give you a promised rate of return after a fixed period of time. Moreover, they also guarantee a payout in case of the sudden death of the policyholder. This not only secures your present but also your future. These plans can offer a tax-free return of 6 to 6.5%. The zero risk nature of these plans is their USP. Irrespective of market volatility, they offer the promised return to the policyholder. They also allow your money to be locked in for a period of 30-35 years which guarantees higher returns. You also have great flexibility to invest with these plans. You can choose to invest Rs 2500 to Rs 2 lakh monthly or annually and even decide to receive the income monthly or annually.
If ULIPs and guaranteed return plans have caught your fancy, here is another option that may interest you - Capital Guarantee Solutions that offer you the best of both. These plans are a hybrid of ULIP and guaranteed return plan. While it guarantees security to your invested amount in event of market volatility, it also offers you higher returns reaped from the upside of the market. Usually, most plans split 40% of the amount in guaranteed return plans and 60% into ULIPs. Apart from this, the dependents receive the life cover in case the policyholder passes away, which is 10 times the annual premiums paid. These plans also offer tax benefits on premiums under Section 80(C) of the income tax act and on the maturity amount through section 10 (10D).
These plans are ideal not just for you, but also for your dependants due to the insurance component. If you invest in Child Capital Guarantee Solution, their future is secured even if you are not around. In the event of the policyholder’s death, the life cover helps meet immediate expenses. The unique in-built feature of waiver of premium ensures that the future premiums are waived off. The child gets a regular monthly income and receives fund value upon maturity.
Annuity plans work best for your retirement planning. These are prudent, risk-free investments that secure your sunset years. Under this, the policyholder pays a lump sum amount to the insurance company to build a corpus that can be made available to them after retirement. You can choose your fixed payouts to be monthly, quarterly, half-yearly or annual in frequency. These plans also offer an investment period for life and up to a 6.5% rate of return. They also come with a life cover that helps you build a legacy.
Now that you have a better view of these options to choose from, do remember the universal rule of thumb - the possibility of getting higher returns hinges on investing in a longer period of time. So, invest early and avoid losing out on returns.
Past 10 Year annualised returns as on 01-02-2024
^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
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