Where to Invest Money to Grow Your Wealth?

In India, fixed deposits and recurring deposits are popular routes to invest money due to the assured returns and relative safety of these investments. While the returns from these investments is comparable, these serve different investment goals. Fixed deposits require relatively large lump sum that accrue interest and grow the investor’s wealth in the long term. Recurring deposits are more suitable for investors who are seeking an investment where they can invest money regularly to develop a habit of saving and grow their wealth at the same time.

The Public Provident Fund, is a government-back long-term scheme, where one can invest money to get guaranteed returns and save taxes at the same time. PPF account can be opened with leading banks or the post office where you can invest money in small amounts or as a lump sum. PPF is a EEE investment, so, the investment made, returns earned and the maturity amount are all tax-free.

Financial security is not just about having a secondary source of income, ensuring you are adequately secured against various risks is also important. This can be achieved by purchasing insurance. In case an investor is looking for an option where to invest money to get the dual benefit of wealth creation and insurance, then Unit Linked Insurance Plans (ULIPs) is the correct choice. Apart from these benefits, ULIPs also provide tax deduction benefits on investments made.

Mutual Funds are considered a good way to invest money in Equity and Debt markets without directly trading in stocks and bonds. While returns from mutual funds are not guaranteed, these investments can help long-term term wealth creation by providing inflation-beating returns. Depending on whether you are seeking a short-term or long-term investment where to invest money, you can choose from a wide variety of Equity, Debt and Hybrid Mutual Funds.

The above options are by no means the only options where you can invest money in India. The list is almost unending starting with government schemes that have assured returns like NSC and Sukanya Samriddhi Yojana to insurance plans like Child Education Plan and Retirement Plans. All you need to do is figure out the appropriate place where to invest money and as long as you meet the eligibility criteria you are free to make the investment of your choice.

There is a lot of potential for long-term gains if you pick the right place where to invest money. This ensures that you make your money work for you and act as a source of secondary income for the future. However, since each investor has unique needs, the choice of investment will vary from one investor to another.

In addition to emphasizing money management and asking yourself - where should I invest my money to create a secondary income, investing your money in different assets can be a terrific strategy to diversify your assets. Diversification ensures that your investment portfolio contains multiple asset classes so that it is minimally impacted by changing market conditions.

Choosing investments that grow your wealth by generating inflation-beating returns is a wise way of settling the debate regarding where to invest money. If your investments outperform the rate of inflation, the money you have invested will grow over time. This way investment can be an excellent method to offset the rising cost of living and improve your financial preparedness for the future.

We work in order to earn money. But investing your money wisely allows you to earn money without doing any additional work. This is because, by investing your money wisely, you can make your savings work for you and help create additional income without any additional work. While there are multiple options using which you can invest money to generate passive income, you need to choose one that suits your unique requirements. However, do keep in mind, most of the times, such income might be taxable as per your income tax slab rate or other applicable taxation rules.

While spending less than you earn can help you achieve various financial goals, investing can grow your wealth faster so that you reach your goals quicker. This hold true whether you are trying to achieve a short-term or a long-term goal. So wisely choosing where to invest money makes it easier to reach your financial goals.

Some investments like Public Provident Fund, Unit Linked Insurance Plans, Voluntary Provident Fund, tax saver FDs, etc. allow you to save taxes. Such investments provide a dual benefit – the growth of your wealth as well as reduced income tax liability under Section 80C of the Income Tax Act.