Investment Planing

In the previous article we figured the reason why to invest, the next obvious question is, where should one invest? and what are the returns can expect by making these investments? The first thing when it comes to investing is to choose an appropriate asset that matches your risk profile. We will know later about risk profile but here are the most popular assets one can invest in : Fixed income instruments Equity  Real estate Gold  Whichever way you look at it, these are the only 4 viable investment options available.  The trick is to make sure we invest wisely, to ensure our investment results in a reasonable rate of return for every unit of risk undertaken, the risk and reward of investments go hand in hand. For example, If an investment is considered risky, then it most likely offers a high return. If an asset is considered safe, then the returns will be moderate too. So risk and reward are like two sides of the same coin. Fixed income Instruments Traditionally Fixed Income instrum

Investing your hard-earned money in assets, which can generate enough returns to sustain through your retired life is very important. Investing is a long process and you need to have good planning to save and invest throughout your working life.   Before learning why we need to invest, let me tell you what would happen if you will not invest or not have investment plan in our life. Assume you earn Rs.   50,000 per month and you spend Rs.   30,000 for  living a regular  life, so you have Rs. 20,000 left every month. Assume that you will not invest that Rs. 20,000 and keep it as hard cash money. Now, the question is, with this practice how much money will you have by the time you retire? We ignore tax as of now for easy understanding. Your company gives you a 10% salary hike every year. The cost of living increases by 8% year on year We assume that you are 30 years old and plan to retire at age of 50, so you will work 20 more years in your life you will not work after the age of 50. Your