Investments
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The document discusses various types of investments including stocks, mutual funds, real estate, gold, fixed deposits, insurance schemes, and foreign exchange. It provides advantages and disadvantages of stocks, mutual funds, real estate, and fixed deposits. It also gives an example of how one person who only used savings accounts had 1.3 crore after 25 years, while another who invested in stocks, deposits, and real estate had 4 crore over the same time period, showing the benefits of diversifying investments.
Investments
- 1. Investments
- 2. Types of Investments •Stocks •Mutual Funds •Real Estate •Gold and other commodities •Fixed Deposits •LIC and other Insurance Schemes •Foreign Exchange
- 3. Stocks Advantages • Easy to liquidate • High returns in the long run • Easy to trade • Settlement is done on the day itself • Brokers are available easily Disadvantages • No guaranteed returns • Can lead to loss of all money
- 4. Mutual Funds Advantages • Professional Management • Profitable in the long run • The dividend received is tax-free • Various schemes available that invest in debt, equity, commodity instruments • Easy settlement • Easy to invest Disadvatages • Can be risky at times • No guaranteed returns
- 5. Real Estate Advantages • Steady long term returns • Rental Income • Can give various tax benefits • Highest returns in recent times Disadvantages • Settlement requires time • No guaranteed returns • If proper documentation is not there, it may lead to trouble
- 6. Fixed Deposits Advantages • Fixed return • Safe • Easy settlement Disadvantages • Return is less when compared to other instruments • You are bound to a time frame which if you break, you are penalized.
- 7. Consider two persons Person 1: Salary is 10lac/annum He deposits only in savings account His wealth is about 1.3 cr after 25 years Person 2: Salary is 8 lacs/annum He invests in stocks, deposits and real estate His wealth is about 4cr after 25 years