Saving and investing your money is the quickest way to build long-term wealth. The most successful investors today didn’t achieve their impressive returns by hitting high numbers alone. They did so, by starting early and remaining consistent in their investments for over 30 to 40 years.
You can do this too. Sounds unreal, right? But guess what, it is not as difficult as it seems. All you need to do is stay consistent with your savings and investments. This can help you achieve significant returns just by investing from your salary.
In this guide, we will suggest the top 5 investment options where you can invest monthly from your salary and make substantial gains in the long run.
Fixed Deposits
Fixed Deposits (FDs) have long been a preferred investment for those seeking security and predictability. Recent adjustments to the Reserve Bank of India’s repo rate have made FDs more attractive by offering improved interest rates. A lower repo rate leads to lower interest rates on loans and higher interest rates on deposits.
Mutual Funds
Mutual Funds create a pool of money and invest in equity, fixed-income, and money market securities. Each fund is further categorised based on different parameters like market cap, growth, and value.
You can choose the categorisation based on your risk appetite. Starting a SIP in one of the mutual funds will help you embrace the habit of saving and build financial discipline. You can do this by providing a standing instruction to your bank.
Equity
You can choose to invest directly in the stock market. Equity, as an asset class, is one of the most popular market segments. With a proper fundamental and technical strategy, you can invest in the equity markets regularly. It is one of the best investment options that exist and can lead you to amass great wealth over time just by investing in NIFTY 50 or SENSEX regularly.
National Pension System
The National Pension System (NPS) is an excellent choice for retirement planning. It offers a balanced mix of equity, fixed income, and government securities tailored to individual risk preferences.
The NPS also provides tax benefits under Section 80C and 80CCD, making it a tax-efficient investment. Depending on their risk tolerance, you can choose from a variety of asset classes within the NPS.
Since it's a retirement scheme, you can redeem 60% of your funds when you are 60 and get the remaining 40% as annuities.
Gold and Silver
Indian women have an endearing relationship with gold. Many Indian celebrations and festivals call for buying gold from time to time. Investing in physical assets like gold, silver, and platinum can prove valuable in the long run. You can consider buying gold on important occasions like Akshay Tritya and Dhanteras.
This will build a yearly habit and build wealth over time. Gold is one of the best-performing assets of all time due to its scarce nature. Make sure to buy hallmarked jewellery and bargain on the making charges if you wish to get a good return on your investment.
Real Estate
If you are willing to take on higher risks, you can consider entering the real estate sector. To build wealth in real estate, leveraging debt is often necessary. If you use debt wisely, you can achieve up to 40% growth upon project completion.
However, you need to have a solid plan for how you intend to use the debt, along with a clear repayment strategy. Real estate can be particularly tricky because you need to select the location and the property carefully to ensure the desired returns.
There is an online debate between buying vs. renting a house. In the long run, owning a home is always better as it gives you financial as well as emotional security.
Tax Saving Schemes
As mentioned earlier, saving is an equally important concept when it comes to planning your finances. Make sure that you are also saving on your taxes. You can choose to invest in a Public Provident Fund or an ELSS scheme to claim a deduction of Rs 1.5 lacs u/s 80 C.
Final thoughts
Maintaining consistency with your investments will make you rich over time. Choose the best option based on your risk tolerance and time horizon. You will see that you have amassed a great amount of wealth over time.
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