Hear It: English
Hear It: Hindi
Whenever we are looking for investments, we expect returns. Many people are worried for good investments or bad investments. Here I am trying to explain what good or bad investment in my perspective is. So first I start with Bad Investments
In initial phase of our job, we give some amount to family to save or invest. Our family members like our parents are one generation behind, so usually they put money in account or make FD which only they know about it. ROI (Rate Of Interest) of FD is only 7% and locking period is also there. Or they take any policy like LIC or other.
Many times, we give money to our friends and relatives, which they promised to return in one year or more without interest or very less. Also, we give hand loans to others at huge interest rates. All are bad investments in my perspective. There is a slight difference between investment and charity. When we give money to our family, friends or relatives, we should consider as charity. Because return is not certain or very less.
Many people invest a huge amount in real state but as per me that is also bad investment in certain way. I have seen that when we need funds, at that time we don’t get buyer, so we enforced to sell to brokers at their rates. They sell at higher rates to needy. Also putting funds in liability more than asset is always bad investment. Putting money into shares without knowledge is always a bad move. Gambling or betting would never make us rich for sure, it is a trap.
In initial phase of our career, we should start investing in mutual funds. SIP is always good investments, because SIP is much safer and high returning move. We want to buy property, first, buy house for ourselves. Let’s say, we get a job in some metro city, where rent is 30k INR per month, but if we buy house then our EMI is 32K per month then we should go for purchase, but if rent is 10k per month and EMI is 30K per month then we should continue with rent.
Also, if we have good knowledge of Share market then stock market is always high returning investments. We want to go for long-term investments then we should consider what kind of policy is required. Like, we are bachelor or married, but do not have kids or dependents then should not go for Term Insurance.
Personal medical insurance is always good option. I see many people invest to save their tax, but if you invest 100,000 INR to save 20k or 30k INR is never a wise decision. Investment should be done only for return and not to save tax, If we are able to save tax, that can be extra benefit but that should not be the main criteria. If we are investing to build our parallel system then it is always a good investment. To know more about parallel system, go through my article “Building Parallel System is Essential if you are in J.O.B.” and if you want to know about division of your salary for investments then go through “Plan your future, future will plan for you”
“Bad Investment can make you bankrupt but Good Investments will make you financially free. Keep Investing Good.”
Very good article, keep writing
very well written
Superb!! Very good article for people like me who are confused about their financial planning. Thanks!
Yes this basic article for people who have not started any financial planning. Thank you for kind words