Hello Readers!
Today, many of us talk about investing money, for our future and goals, but do we actually know what does investing means? The definition of investing that we are familiar with is what exactly investing means? If you ask a child about what is investing, the most common answer that you will get is, “investing is storing your money in your bank account for future goals”.
Not for children but, still, there are many youths and adults for whom investing is simply linking their money with banking relationships. Many believe that keeping their money in a savings bank is an investment practice, while some believe buying a house is an investment, also for some their EPF (Employment Provident Fund) and insurance plans are an investment.
Well everyone has their own perspective of investing. But Investing in your money has some more forms than what is mentioned in the above para.
In today’s day and age, investing can be done in many other ways that give dynamic outcomes. The point is being able to distinguish genuine investments from various other options that is suitable for the growth of your money.
Let us have a look at different investment options:
YOUR INVESTMENT IN YOUR BANK ACCOUNT
When you store your money idle in your bank savings account, it is your saving and not your investment. This is because in your saving account your money is still and do not grow. However, the bank does pay you an annual interest on your deposits in the account, but in most banks, that figure is lower than the annual inflation rate. It simply means that you have money loss at the end of the year because you didn’t receive that return on your investment which is required for your goals.
YOUR INVESTMENT IN YOUR PROVIDENT FUND
Many employees are those who get their salary in hand after a deduction known as EPF (Employees Provident Fund). This EPF is similar to a monthly contribution from their salary which is deposited at a place. EPF can be referred to as an investment as the money deducted from the employee’s salary is put into a large pool of managed assets that deliver a defined and announced return on an annual basis. Here in EPF, the longer you keep your fund, the longer it grows, and the more you get when you withdraw it after a long time.
YOUR INSURANCE PLAN
If you have taken any kind of insurance, whether it be life insurance, health insurance, or objects insurance like car insurance bike insurance or more, you will get money in all these insurance plans, but please note these are not recognized as pure investments. The insurance plans are basically meant for insuring something, be it your health, be it your car or be it your life. You get the returns from your insurance plans in case only if you get hospitalized or damage your car or if you lose your life.
YOUR INVESTMENT IN YOUR HOME
Your house or your home can be your asset, but it cannot be categorized as your investment and talking about how much monetary gain you have on this asset is a worthless point. Your house can only be taken as an investment if you sell them for your goals, but generally, people sell their house, only when they plan to buy a new house, better than the first one. Buying a home is about your lifestyle and not about your investment.
YOUR INVESTMENT IN YOUR GOLD
When you buy gold jewelry, the main purpose is to wear and add more attractions to your beauty, they cannot be regarded as an investment. However, they can be your assets and can help you in your rainy days, like you can take a loan against it and have some expectation of return in the long run.
YOUR INVESTMENT IN YOUR FINANCIAL SECURITIES
Your investment in financial securities like mutual funds, stocks, bonds or any other kind of ‘paper’, is regarded as a pure investment, which is linked to your goals, and whose purpose is to grow your money invested for your future financial goals. This growth may be in the form of capital gains, dividends, or interest.
Here the point is, it is necessary for you to understand what is the pure form of investment that makes your money grow for your future goals, and what is for your use. Be clear, where to invest for your goals so that you won't face any financial burden in accomplishing your goal. Be clear what is your asset, and what is your investment, it is important for wealthy financial health.
For any kind of investment query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).