Money carries the same value for life as fuel carries for an engine; neither more than that nor less than that. If you have money then you must use it to make more.
Investing for some people is an art, for some it's a science, for some it's gambling. There are different perception levels of investment as it carries the risk along with it. But risk can be taken care of by being more aware and knowledgeable about the various options available in the market. After considering your needs and goals, wisely choose the most suitable option that will not make your money go waste.
Marriage, education, business, retirement and so on are some of the major reasons for investment. To fulfil these goals of life, one needs to invest in a long term plan. Here are top six long term plans which can secure your future.
Mutual funds are a popular long term investment option for investors. It is an investment vehicle that pools the money of the investors and invests that money in different securities. The investment can be in shares, money market securities, debt securities or a combination of any of these. Investors are issued with mutual fund units in accordance with a quantum of money invested by them.
A stock can be defined as a type of security that signifies ownership in an organization. It represents a claim on part of the organization's assets and earnings. Stocks offer various benefits to customers like compound interest, time value of money, tax deferral and diversification.
Life Insurance Policies:
Life insurance provides you dual benefits of protection and investment. In the event of insured's death, the insurer offers a lump-sum amount to the beneficiaries, which is called death benefit. It is a very safe investment as it is strictly regulated by IRDA. This is also one of the best investment vehicles for retirement planning.
Ordinary shares in the course of the company's business are Equity shares. The shareholders of these shares do not enjoy preference of dividend and repayment of capital. Investors will be paid dividends out of the profits made by the company. The main benefits of equity shares are limited liability, potential for profit, hedge against inflation and free transferability.
Depending on the structure of the bond you purchase, bonds are a reliable source of current income. They also provide a certain amount of liquidity as the market of bond is active and large. Bonds help to provide diversification in an investor's portfolio as they generally may not move in tandem with stock investments.
Bank Fixed Deposits:
This long term investment option is one of the safe most in which rate of interest is guaranteed not to change for a fixed term. Customers can also avail loans against this investment in case the rate of interest paid to the customer exceeds Rs 10,000 in a financial year. This investment is for those who want regular income.
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