The best investment at a young age is investing in yourself for the betterment of your knowledge and skills. This article has nothing to do with your personality growth but, will give you an insight about the investment opportunities for the youngsters. ‘Investment’ and ‘young age’ is really a constructive combo, which many of us don’t know. Except those working in financial background,most of the youngsters don’t know how to invest the hard earn money in a productive way.
The sad part of the story is that, youngsters believe that investments are not their piece of cake and its all for the mid-aged people with responsibilities.
The real fact is that, the young age is best time to try your luck in your investments while you doesn’t have much responsibilities. Let’s see 4 types of investments, which can be started even with a small amount of Rs.1000 per month. That means you can have all these 4 invests with a much flexible financial portfolio, if you are a person with at least Rs.4000 as a saving per month.
1) Recurring Deposits
A recurring deposit is a type of term deposit which allows people to save a fixed amount every month. The amount can be variable for different banks ,usually from a amount as small as Rs.500 for a period from 6 months to 10 years. The return is in the lower side from 6% to 7.5%, the amount can be auto deducted from your account for a period that you have committed. You can call recurring deposit as a stepping stone to your investment future, because you can start with O% risk with a systematic investment.
2)Endowment Type Insurance Plan
When you have a bottle of water in your bag, you will never feel thirsty in a journey. If you don’t have a bottle,you will feel thirsty like never before. That is the same psychology when it comes to the life insurance policy, you feel lot more secure in this dramatic world when you have a policy with you. In an endowment plan, certain amount is kept for life cover – insurance, while the rest is invested by the life insurance company. If the life assured outlives the policy term, the insurance company offers him the maturity benefit. For youngsters its a great combo to have assured life with a part of saving receivable after the maturity.
The returns and premiums are really variable according to your choice and surely the minimum premium will not be higher than Rs.1000 per month. Commitment of payment will be usually more than 5 years and you will have a significant loss of money, if you stop paying the premium in between.
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities and shares. The returns on the investment is directly proportional growth of the value of the securities and shares that a mutual owns. There are hundreds of mutual funds and so the return varies a lot ,usually 5% to 23%. There is always a risk while investing in fluctuating market, but mutual fund have the advantage of financial professionals handling your investment. You can invest in mutual funds in lump sum or using systematic investment plan(SIP) for monthly investment. But, SIP’s have a lot more control over a waving market and it can make your investments much more safer. The advantage of the mutual funds is that, you can stop payment and withdraw or hold your investment at any time you like without any loss.
Most of the youngsters have the feeling that investing in stock market is like gambling with money and think that their financial knowledge is insufficient to understand the market. Stock market is not the cup of tea for someone who doesn’t like to learn the financial market. The risk of investing directly in stocks is much more compared to the mutual funds. But, you have a good chance to get more returns on your investments. The most attractive part of stock market invest is the flexibility, there is no commitment for the payment or withdrawal and you can invest only when you like to do so, even after starting your investment.
For each of the above investment methods, there are a lot of different vendors in the current market and you will find 1000’s of permutations and combinations for the same. Its your responsibility to research and the find best and apt options for your investments. The early you plan for your investments, the early you can become financially stable.