Money Matters! Investments as a Necessity

Even before people understand their present, they worry themselves about their future. It’s the natural human tendency, and it’s not just with one person; the entire human race follows the same pattern. Everyone wants a better time tomorrow, nobody longs for a better time today. Hence, I suppose, we invest our money at places where it can grow, and that’s how important investments are.



So, question number 1, what is the right time to invest? No one is qualified enough to help you with the answer, but as soon as you realize you need to invest you should invest. Start investing as soon as you get your first job, or when you have enough savings to invest. Just remember, you don’t have to disturb your daily life and over-compromise with your needs to adjust money for investing. What matters is you survive the present to enjoy the future.

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What is the right vehicle to invest?

This is something you have to figure out yourself. Everyone person on the face of planet earth has a unique need in life. So, you are on your own to decide what it will be, and where it will be.

How to decide where to invest?

This depends on many factors, but the important ones are:
#1. Interpret your needs and review your goals.
#2. Be practical and find out how long can you invest.
#3. Talk to the right people and share your needs.
#4. Choose the right investment plan.

Fixed Deposits VS Mutual Funds:-

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#1. Risk Involved: Fixed deposits have a fixed interest rate, whereas the returns on mutual funds are never fixed- it can be ten times higher than the initial amount or the exact opposite. Thus, mutual funds involve higher risk as compared to fixed deposit.

#2. Return on Investment: “No Risk, No Gain” We all know it and apply it in our life. Investments are no hide and seek game, the risk involved changes from minimum to maximum as the returns on investment increases. Overall, investment is a different ball game and higher the risk, more the profit. Out of the two prospects, mutual funds involve higher risk and higher profits, whereas fixed deposits are the exact opposite.

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What to remember before investing your money for better gains?

#1. Split your investment: Fixed deposits or mutual funds are only worth if you are investing a large sum of money. Why? Greater sum implies greater income amidst the same interest rate, that’s simple maths… However, if you’re investing a big sum like five lakh for a maturity period of five years, the revenue collected as interest will be taxable. Thus, split your investment into smaller fragments and invest them separately. You will earn the equivalent profit with an added bonus- that is your investment will be supported by deposit insurance which is only for investments up to one lakh.

#2. Go with government banks or firms: Government/public sector banks and firms offer a higher rate of interest on fixed deposits and mutual funds as compared to private banks and investment firms. Thus, whatever you’re planning for, better invest in the public sector.

#3. Invest for shorter time periods: In a year or two the interest rates fluctuate and put your investment at risk, thus it’s advised to invest for shorter maturity periods.

#4. Submit your tax declaration: The income from fixed deposits and mutual funds are not tax-free, hence, TDS is deducted from the earned revenue, depending on the tax slab the investor belongs to. So, if your income is below the basic taxable limit, make sure you’ve submitted your declaration on time to avoid TDS deduction.

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Now moving ahead, make and save some money while you still can and invest in the right place. When you get old, especially post-retirement, the income sources start depleting and sustaining life becomes difficult and then the investments will feel like an angel. So, as soon as we grow up and start working, the first piece of advice we get is about making the investment. To be honest, investments are a real necessity for everyone, to ensure peace of mind on rainy days.

When luck plays by your side, the risk taken with your smallest investments can even turn you into a millionaire. Whether it’s about other important matters of life or doing an investment, if you don’t have the guts to take the risk you shouldn’t expect glory.