Investment Options

                                  HOW TO INVEST?

"Sir Francis Bacon: Money is a great servant but a bad master"


Various options of investment are:
1. Stocks
2. Bonds 
3. Mutual Funds 

STOCKS: Stocks are shares of publicly owned companies. Their value goes up, investment goes up and thereby, higher potential of returns. Investment in stocks has a higher risk.

BONDS: Bond is a  loan to a company or Government which is repaid at a particular term e.g 5 or 10years with interest. Returns are lower compared to stocks and lower risk. 

MUTUAL FUNDS: It is an investment portfolio. Risk is spread over 100 or 1000 shares.  A portfolio Manager is assigned to buy or sell and to analyse the market. 

Where to Invest: You can invest in an INDIVIDUAL Account say e.g: 5000 per year for 30 years. There will be an 8% growth per year. Ending value will be $566416
there by growth is $46416

INDIVIDUAL RETIREMENT Account is where you can get a tax deduction for your contribution made. Example: contribute Rs/$500 per year the money grows tax-differed but when taken out retirement, cannot access Provident Fund. While you withdraw the amount from Individual Retirement Account (IRA) there will be no tax deduction and tax free growth. 

Tip: Read Rich Dad Poor Dad by Robert T. kiyosaki Very interesting and fun to read, You will learn how to earn online 

Comments

Post a Comment

Popular

Image
Navigating Homeownership: Insights from "How to Buy Your First Home" by Phil Spencer Buying your first home is an exciting yet daunting journey. Phil Spencer, a well-known property expert, offers invaluable guidance in his book, "How to Buy Your First Home." This resource provides practical tips, strategies, and insights to help first-time buyers navigate the complex real estate market. Here’s a summary of key takeaways and tips on how to make the most of this book. Key Takeaways from the Book: 1. Understanding Your Finances : Spencer emphasizes the importance of assessing your financial situation before diving into home buying. This includes evaluating your income, expenses, and savings, as well as understanding your credit score. 2. Setting a Realistic Budget : Establishing a clear budget is crucial. Spencer advises considering all costs associated with buying a home, including deposit, mortgage payments, insurance, and maintenance. 3. Choosing the Right Locatio...
Read more

Credit Card Simplified

Image
Credit Card Simplified Credit card may give an image of joy or fear. It can be good or bad. But if you keep reading you may find out that having a credit card is helpful. ·          Credit card is given to a person by a bank as a privilege. Bank keeps in mind your salary and debt to income ratio to set your credit card limit. The higher your debt the lower your limit. ·          Bank provides you a credit card as a benefit to you and their services. Credit card is a short loan provided to you to afford things which you could not purchase on debit card. ·          This increases banks brand and earn extra money in case you miss your payments on time. But if you pay your payments up-to-date then you have no interest charges and you have what you wanted to purchase. ·          My advice is that you check your statem...
Read more

INSURANCE

Image
To avoid risk in your daily life you must be assured of some security for your precious life, security for your journey, security for your business and the list goes on... For this very reason Financial Institutions have provided safety measures which can protect us from these unexpected risks, that is nothing but Insurance! The utmost important insurance is Life Insurance. It will give your family security when you are not there for them or unwell due to unexpected conditions.  It can be accessed when you need money for an emergency. It's like a saving for a purpose which should not be touched unless for the very purpose mentioned.  Life insurance is a strong wall of protection for your loved ones. It makes sure amount is deducted at the right time each month. I believe that you earn for yourself and not to pay bills alone. So make sure you do yourself a favor by setting up a life insurance to be safe in future. Do not forget it can be added in your IT return f...
Read more