The funds can be invested in a variety of wise ways to enable rapid growth. In general, the following are some wise investment choices that are available:
1. Land: An asset that doesn't lose value with time In my opinion, this is the most secure way to invest money and build wealth over the medium to long term, potentially double or even triple your initial investment. Actually, there is no upper limit to it. But this typically calls for a significant amount of fieldwork, research, labor-intensive legal work, and time. Furthermore, there is no set method for evaluating this; it depends primarily on market valuation.
- There is a 20% short-term capital gain tax on earnings on land sold within three years, and a 10% tax on land sold beyond three years.
- These days, real estate and plot buy/sell deals are handled by a large number of websites. It is recommended that land/plots be purchased only from reputable dealers/companies, and that legal experts review the legal documentation.
- Plots on the outskirts or beside freeways or expressways are excellent investments and are also less expensive. However, any site in a city would already be expensive and might not increase in value at a fast rate.
2. SHARES, EQUITIES, OR STOCKS: This is most likely the fastest path to wealth growth. Investing in the stock market is equivalent to becoming a shareholder in the company and making an investment in its operations.
This is among the simplest ways to use a Demat Account to invest money with a single mouse click. Completely hassle-free, paperless, and transparent transaction process. The largest advantage is that if the investment is held for more than a year, the profit is entirely tax-free. If shares are sold within a year, even the short-term profit is subject to a flat 15% STCG tax.
- In a few of years, months, or even weeks, it can double your money.
- A reputable business will also periodically declare dividends that are free from taxes, split shares, and offer bonuses, all of which can significantly raise the value of your investment.
- Additionally, there are numerous possibilities each day to earn from intraday trading.
ULIPs, ELSS, and equity-linked mutual funds, among other indirect share market investment options, can provide substantial returns if selected prudently. Nonetheless, investing in stocks, either directly or through mutual funds, is totally vulnerable to market risks, necessitating the use of at least some fundamental risk mitigation techniques.
3. DEBT: Although it is the least hazardous investing option, debt cannot accelerate the growth of your money.
- PPF (Public Provident Fund): Over time, one of the greatest choices for debt investments. In addition to being fully tax-free, the investment qualifies for tax savings under Section 80C. For the first seven years, funds are locked and cannot be invested in excess of Rs. 1.5 lakhs annually. But over time, proves to be the greatest and safest method of accumulating wealth.
PPF can be perpetually renewed for an additional block of five years following its fifteen-year maturity.
- Fixed Deposits (FD): Under this, funds are locked for a predetermined period of time and are typically taxable. If the money is removed too soon, there is typically a penalty.
- Post Office Plans: NSC, KVP, RD, and so forth. Interest rates aren't that high, though. Indian post offices are not very popular because they haven't kept up with the internet era.
MYTHS:
A. Purchasing life insurance also counts as investing: NOT IN THE LEAST.
A life insurance policy's only objective is to provide financial support to the insured's surviving family members in the event of an unexpected or early death. This can be accomplished by making one-time or recurring minor premium payments.
Individuals purchase life insurance policies purely to reduce their tax liability. The ideal candidates for life insurance are those who: - Are the family's sole provider and have non-working dependents; - Have poor financial standing and rely on a meager source of income.
- Those who labor in hazardous environments like mines, factories, etc.
B. Buying an apartment is a wise financial move:
Certainly not. Purchasing a plot of land is a much better investment than purchasing an apartment. While a structure or apartment is a depreciating asset, land appreciates in value. Both buildings and apartments age with time.
A flat's price can rise significantly in the first three to five years after purchase, but as the apartment gets older, its appreciation rate declines during the next five to ten years and may even stop after fifteen to twenty years. Therefore, a flat purchased only as an investment should ideally be sold within five years. But if you sold before the three years were over, you would have to pay 10% LTCG tax and 20% STCG tax.
C. Investing in gold or silver jewelry is a wise way to manage debt:
Certainly not. Purchasing jewelry and investing in gold or silver through ETFs, etc., are very different. First off, jewelry is never crafted from 24 carat gold or silver; instead, it has additional decorative features incorporated into it, which raises the weight but not the cost.
Secondly, fees typically amount to 15-20% of the current market price when the jewelry is sold. Additionally, you may or may not receive substantial profits from investing in the gold or silver market or in the bullion market over a one to three-year period.
D. The Stock Market Is a Gamble: UNTRUE. The Lottery is a game of chance in which you can either win more money than you wagered or lose the money you invested. It's also known as betting.
- Investing in stocks (especially the cash segment) is not gambling since you never lose all of your money until the stock you purchased drops to zero. On the other hand, the share market has segments such commodities, derivatives, futures and options (F&O), etc.
which have a significantly higher risk than the cash section and could lose your entire investment. The share market is actually a speculative enterprise in which the amount invested in companies rises or falls in response to the long-term performance of such companies.
E. Unit Linked Insurance Plans, or SIPs, are a suitable option for systematic investments:
- First off, since it's a life insurance plan and the premiums are invested in the equity market, the return is never guaranteed and could even be negative if the market has underperformed over the investment period. Second, SIPs invest your money in the market on predetermined dates on a regular basis, regardless of market conditions—high or low. But in order to get the most profits, the funds should preferably only be invested during times of market volatility.
However, the money should ideally only be invested when the market or share price is trading lower in order to maximize returns.
I hope this response is useful.
Source: https://biblestudyforum.com/threads/list-of-best-ways-to-invest-money.840/#post-1002 |
