People who don’t invest their hard-earned money risk missing out on opportunities to improve their financial standing. Most people aren’t particularly fond of delayed gratification, and parting away with their money in the short run makes them feel a little uneasy.
There are very few means of multiplying your wealth outside of being super famous or being at the helm of a crazy successful startup. In most cases, your best bet is to simply invest your money in low-risk options. Here are five great options:
1) Equity
Purchasing equities in successful companies is the safest way to grow your wealth in the long run. How you choose a company or stock ultimately depends on your appetite for risk. If you can’t bring yourself to trust stock, then the next best alternative is to go through mutual funds. The key with equities and mutual funds is to be patient with results, because it can, and will, take time before you can expect great returns.
2) Gold
Gold is arguably the safest option on this list when it comes to securing wealth. The lustrous metal has more than proved its mettle in times of economic difficulty, allowing people to store their wealth when fiat currencies fail. A great way to invest in gold is by purchasing physical gold, gold deposit schemes, gold ETFs, or gold mutual funds. You can find current gold prices here.
In the case of physical gold, make sure to find an appropriate place to store it.
3) Debt Instruments and Initial Public Offering
Debt instruments such as corporate bonds and government bonds are a great way to provide some cushion to equity investments. There are several types of funds, including short-term, income-based, liquid, and FMP. How you choose these depends entirely on you, but a great choice would be to just buy bonds or debt funds. Just make sure you invest in reputable debt instruments and diversify your portfolio by allocating to both long-term and short-term debts.
Initial Public Offering or IPO is when a private company makes it possible for investors on the stock market to purchase shares. It is possible for these shares to be held by early investors and founders. After a company offers IPO, it becomes a matter of who arrives first, making it important to be among the first to buy the shares.
It is common for companies to pay enormous dividends to investors after a small period of time. But IPOs aren’t a magic pill that automatically boosts your wealth, although it doesn’t hurt to invest a small portion of your stash and bet big while keeping risks low.
4) Public Provident Fund (PPF)
PPFs are the choice of investment for people with an average understanding of the stock market, and they also minimize risks and offer a sizable return on investments. Most PPFs have long tenures of over 15 years, giving investors the benefit of fixed returns.
5) Fixed Deposits
Fixed deposits are agreements between banks and investors. The bank pays a fixed interest for the duration of the fixed deposit. Lending money to the bank with a long-term commitment will yield the highest interest rates. Investors can choose to invest their money for durations of 3 months, 6 months, 1 year, and even 10 years.
Common interest rates can vary from 3 percent to as high as 8 percent, depending on the plan.
