2. I don’t know where to
invest some extra money I
have. What do you
suggest? Which is the best
investment?
Oh, there are many
options. You choose
what is best for you..
2
4. Buy house / apartment or Land
Earn rent income
Or can be used to live and enjoy the comforts
Property
4
5. The good and bad about property
Advantages
Asset Value will go up
Can earn regular income
Can live in better comfort
Disadvantages
Small amount investments not
possible. Will have to take loans
Not easy to sell
Maintenance is expensive
Pay tax on rent and sale gains
5
6. Fixed deposit in bank, Post office or companies
Earn fixed regular interest incomes
Can be assured of a fixed value at maturity
Interest income is taxable
Can be converted to cash fairly easily
Fixed Deposit
6
7. The Good and bad about fixed
deposits
Advantages
Earn regular income
Low risk hence stability in
wealth
Easy to liquidate and convert
to cash
Disadvantages
Interest rate can fluctuate (in
1990s > 12%, in early 2000s <8%,
now about 9%)
Interest is Taxable
Not completely risk free
7
8. A company when it needs money for expansion or other
business needs, raises money from people willing to invest
Those who invest become joint owners of the business
If business does very well then profits to all the
shareholders (owners) can be high
At the same time, losses in the business will also be borne
by the joint owners (shareholders)
When companies issue share for the first time it is called IPO
(initial public offering)
Shareholders can choose to buy and sell their shares within
themselves in the share (secondary) market through demat
and trading account
Share market
8
9. The Good and bad about share
market investing
Advantages
Very easy to Buy and Sell
Can make high returns
Good companies can grow a lot in
value over a long period of time
Can earn regular dividends
Mostly earnings are tax free
Disadvantages
Risk of even losing invested
amount in short term
Dividends are not regular or
guaranteed
Need demat and trading a/c to
operate
9
10. Invest indirectly in stock and bond market
Invest in a fund, fund manager will choose which stock
to buy or sell and when
Expertise and research enabled investing
Small amounts can be invested
Regular investments possible
Regular and easy withdrawal also possible
Tax efficiency
Mutual Funds
10
11. The Good and bad about Mutual
Funds
Advantages
Very easy to invest and redeem.
Online free portals available
Experts research before
investing
Small amounts can be invested
Disadvantages
Fund managers cost money –
charge fees
No guarantee of dividends or
returns
No control over which stock is
bought or when
11
12. Actually insurance is only to protect
against risk
But some policies like endowment,
ULIP, money back policies also
provide investment options
Forced saving is a good feature
Long term returns are less than most
other options
Tax benefits both at the time of
investing and maturity 12
13. The Good and bad about Insurance
Advantages
Secures your life
Some policies also give
returns
Tax benefits
Disadvantages
High premium on high Sum
Assured
Returns may be lesser than even
inflation (endowment)
ULIP returns linked to share
markets – hence no guarantee
High costs
13
14. Gold and Silver are types of
commodities
Protection against inflation
Invest in physical form, through mutual
funds or through exchanges like MCX,
etc.
Price volatility – no guaranteed returns
Gold / Silver
14
15. The Good and bad about
commodities
Advantages
Inflation protection
Low entry capital
Easy to invest
Disadvantages
Earnings not assured
Safekeeping costs money
Taxable returns
15
16. But with so many
options it is so
confusing. What is
the best ? Well, the best investment
gives High returns for no
risk, comes free and is very
easy to buy and sell and is
not taxable.
Unfortunately, there is not
such option at all….
16
17. Then what to do?
My friends are all
suggesting different
things?
Will you go to the medical
shop and ask for the best
medicine available? Or just
because your friend is taking
a medicine will you take the
same medicine? NO.
Why take such risks with your
hard earned money then?
17
18. Yes, that I agree.
What to do then?
Though there is no best
investment, you can find what
is most suitable for you. This
will depend on what you want
to use the money for and
what will give you peace –
your life goals and risk
tolerance..
18
19. Life goals, risk
tolerance… wow,
what are these?
They should be the
guiding light to your
investments. Understand
them well with the help
of a professional
unbiased adviser. Invest
in what will make YOU
live a rich life and not
someone else !
19
20. Happy Investing
Did this make sense to you? Did you learn a bit or two?
Can you take a minute to give your valuable feedback
on the link here please.
Thanks in anticipation.
20
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