Why is Investing Important and Where Should You Invest as a Beginner in 2022
The importance of investing in terms of gaining security for the future has never been more pronounced than nowadays. The way life has a habit of panning out in the current age, only savings may not offer adequate funds when needed. If you have idle wealth lying around in savings bank accounts, you must allocate these so returns are regularly earned. Cash that just sits around doesn’t earn anything, and doesn’t have the ability to help you when the impact of inflation strikes. So, to make money to work for you, what do you do? You invest.
Why should you invest?
You may already have a good notion of why you should invest, but here are reasons clearly defined:
- Investment assures you of financial security, both in current times and for future periods.
- Investment allows for the growth of wealth.
- Investment helps you save for a rainy day, meeting emergencies without worry.
- Investment, when you opt for portfolio diversification, allows you to disperse your funds so that you earn from different sources.
- Investment can beat the adverse impact inflation creates.
- Popular investment options in India instil a sense of discipline in financial dealings. You may also learn a lot in the process, and independently handle your own finances. For instance, you may want to invest in securities and will learn to open a free demat account.
- Investment makes it easy to reach your goals, such as purchasing a house, etc.
Popular Investment Options in India
The next year is almost upon us, and if you want to make it financially healthy, you may consider investments of various kinds, making wealth multiply. Here are some popular investment options in India for 2022:
- Mutual Funds - Comprising a pool of funds collected from several investors sharing similar objectives of investment, a mutual fund is an investment that is an amalgamation of assets. The funds collected may include bonds, stocks, etc. This is a flexible way to invest as you may opt out as and when you please.
- PPF - The importance of investing in a Public Provident Fund is in its tax efficiency and the compounded returns it offers. This is a government-backed initiative and is also very safe. You can start planning your financial future today and Calculate your potential returns with PPF Calculator.
- Direct Equity - A frequently visited investment avenue, this refers to buying and shares, indirectly owning a company stake. You can trade, that is, buy and sell shares to make profits.
- Fixed Deposits - Regarded as ideal channels of investment, fixed deposits ensure guaranteed returns on investment with flexible tenures to suit individual needs.
- EPFs - An investment scheme to see you through your retirement, EPFs are particularly designed for salaried individuals. Certain amounts are saved from the salaries as well as a commensurate contribution from employers, also eligible for a deduction of tax.
Invest to Earn
A well known investment channel is investing in securities and markets of commodities. There are also many gold schemes available these days, instead of the hassle of holding physical gold. You can find these and more at Motilal Oswal, India’s reliable broker.
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