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: In Unit Linked Policies, the investment Risk in the investment portfolio is borne by the policyholder.
With Axis Max Life Investment Plans
Written by
Abhishek Chakravarti
BFSI Writer
Abhishek is a financial writer with over 6 years of experience in the BFSI sector. Prior to his current stint with Axis Max Life Insurance, he has worked with leading fintech startups. He specializes in writing about taxation and various investment products like ULIPs, retirement plans, guaranteed investment plans, mutual funds etc.
Reviewed by
Sahil Rawal
BFSI Expert
Sahil Rawal is a digital & brand management specialist with over 10 years of experience in Financial Services Industry. Life insurance professional with expertise in digital marketing strategy, website content marketing and brand communication designed to increase brand awareness, drive engagement & sales.
An investment is essentially an asset that is created with the intention of allowing money to grow. The wealth created can be used for a variety of objectives such as meeting shortages in income, saving up for retirement, or fulfilling certain specific obligations such as repayment of loans, payment of tuition fees, or purchase of other assets.
Understanding the investment definition is crucial as sometimes, it can be difficult to choose the right instruments to fulfill your financial goals. Knowing the investment meaning in your particular financial situation will allow you to make the right choices.
Investment may generate income for you in two ways. One, if you invest in a saleable asset, you may earn income by way of profit. Second, if Investment is made in a return generating plan, then you will earn an income via accumulation of gains. In this sense, ‘what is investment’ can be understood by saying that investments are all about putting your savings into assets or objects that become worth more than their initial worth or those that will help produce an income with time.
Financially speaking, an investment definition is an asset that is obtained with the intention of allowing it to appreciate in value over time. Generally, investments fall in any one of three basic categories, as explained below.
The question ‘what is investment’ is mostly followed by understanding your investment objectives and identifying where to invest. Keeping aside investments in real estate and assets like jewellery and all, when it comes to different instruments, another aspect of understanding ‘what is investment meaning’ is to know about different types of investments. The first refers to equity investments, and the second category includes debt instruments. If your investment objectives match, equity investments can offer greater returns and carry relatively higher risk. While debt instruments are less risky, but offer relatively low returns.
Further, what is investment meaning can also be understood from the perspective of how they are acquired.
Following are different types of investments in India:
For your benefit, you may also find out what is investment for tax saving and invest in such plans. Also, as discussed earlier, when you ponder over what is investment meaning and similar questions, consider adding term plans and health insurance policies in your portfolio for securing your family.
After this, put your funds in instruments like ULIP, mutual funds, ELSS (Equity linked savings scheme) and other government plans.
When talking about equity investments, you may wonder what is equity share?
Here’s what you need to know to understand what is equity share:
Any corporation can use equity shares as a long-term financing source. These are non-redeemable shares that are issued to the general public. Shareholders have the right to vote, share profits, and claim a company's assets. Understanding what is equity share can help you make more informed decisions and create a diverse investment portfolio.
Now that you know ‘what is investment definition,’ and how it can help you create wealth, the next thing is to understand how to invest. Here are a few vital points you must keep in mind before you decide to invest.
Also, when thinking about ‘what is investment meaning’ and ‘where to invest,’ consider giving priority to those instruments that offer security to your loved ones. It may include life insurance policies like term plan, ULIP (ULIP full form: Unit Linked Insurance Plan) and other such instruments. You may consider the objectives for investment to generate appropriate returns from it.
Since funds are influenced by market forces, it is imperative that you closely monitor them periodically. You may also consider readjustment if your portfolio is not generating good returns.
Depending on your investment and savings objectives, you can choose from a variety of investment plans offered by Axis Max Life including Platinum Wealth Plan, Smart Wealth Plan, Savings Advantage Plan and more.
Before you decide to invest your earnings in any one of the many investment plans available in India, it’s essential to understand the reasons behind it and the investment meaning. While the individual objectives of investment may vary from one investor to another, the overall goals of investing money may be any one of the following reasons.
Reasons to Start Investing Today
The question, ‘What is investment meaning?’ becomes crucial when asked about savings. Savings simply mean putting aside a part of your earnings over time. The saved amount of money is subject to no risk and, therefore, does not help you earn any profits or returns. However, its value appreciation remains more or less stagnant, as there is no addition over and above what you add each month.
On the other hand, investment definition is based on the concept of earning returns or profit on the money you first put in a fund or spent on an asset purchase. Remember here that the involvement of risk is what makes them profitable.
When understanding ‘what is investment meaning,’ remember that there is a direct relation between returns and risk, meaning more significant the risk involved, higher are the chances of earning greater returns. That is why when you are identifying ‘what is investment meaning?’ for you, you must check the risk profile of different options and review your risk appetite.
Some people waste many years of their life thinking over ‘what is investment’ and figuring out the investment objectives and how it is beneficial. They hesitate to consider investment meaning for wealth creation because of the involvement of risk. However, many investments are also risk-free, and some carry only little to moderate risk.
When you are young, it is best to fully understand about ‘what is investment meaning’ and its role and then start. At an early age, you have few responsibilities and, thus, have a better tendency to experiment with different investment and leverage those, which suit your requirements best.
Investing early is also better because of the compounding benefits on investments that help grow your money. With more years ahead, you can reap maximum benefits on your investments, provided you first understand and evaluate different aspects of ‘what is investment meaning’ and then start early.
Every one of us has a set of goals that we strive to achieve in our lifetime. In today’s day and age, however, we cannot rely on our savings only.It is through investment plans that we can create a robust financial portfolio to realise these goals.
To fulfil your goals of affording a home or securing your retirement financially, it is crucial that you identify the best investment plan that will help you grow your money over time. Therefore, you need to have a goal and a tentative timeline to achieve in mind before you start investing in any of the best investment plans with high returns. Remember, once you have a goal in sight, you need to start investing as soon as possible – doing so will help you streamline the process.
You may be wondering why to give so much importance to the question ‘what is investment meaning,’ when you can work towards saving more from your earnings instead. Taking a portion of your income and saving each month will only create a reserve fund, which may prove to be inadequate in covering your family against a medical emergency.
On the other hand, now that you know ‘what is investment,’ you will understand that investing your money leads to wealth generation and helps in achieving life goals.
Now that you know what is investment definition and role, and about a few plans, and its benefits start early for maximum benefits. Choose the right plans and track your portfolio for ensuring high returns. So, find out what is investment meaning for yourself by putting your money in different options and see them grow.
Investment in market linked investment plans are subject to market risk. We suggest to consult your financial advisor before investing.
ARN NO: Aug23/Bg/02S
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