What is the best way to invest your money?

Investment of Money or saving of money is all the same. When we talk about investment its should primirarly determine the size of Investment with time horizon of investment with risk appetite.

I beleive all investment must have some greter or less risky returns. Whether is bond, Gold, Silver, Potato, Agriculture, Equity, Mutual Fund, Insurance, Stocks, FD`s, NSC, Postal deposits, Crude Oil, Realty, Land , Business etc etc..

The major factor is how the one allocate its size of Investment.

Another type of investments that banks offer are bonds. Some private institutions like companies also offer bonds. There is little difference between bonds and certificate of deposits.

A bond also pays out around seven percent as interest for the period of four years. Bonds should be invested in only when there is no immediate need of the money for a set period of time.

Interesting question which most investors or prospective investors have in mind. There is no one shot answer than can apply to all, even if there was one answer that fits all it would be either too simplistic or result in a demand or rush making the value of that investment opportunity high and thereby making it expensive to invest and reducing returns.

Now I will just give some golden rules for small and lay investors who want to invest in avenues that can provide reasonable returns, capital safety, low to medium risk, liquidity and flexibility and lower entry or exist costs.

1. First step is to build up adequate savings, which will consist of emergency funds say 3 to 6 months earnings for contingencies, and investment funds, which will be used for investment in various avenues.

2. These investment funds will then be utilized for investing in various investment opportunities after good research and understanding of various asset classes, instruments, etc. For instance asset classes can be equity or stocks or other equity instruments, some FDs, Gold, Real Estate and other opportunities.

3. The first step is to get in to asset classes that provide adequate capital safety albeit lower returns just to make sure you foundation does not get destabilized by risks. I would recommend entering short FDs and Gold to start with and moving on to Nifty ETF. Investing in Gold should be through Gold ETF. Unfortunately most people have a myth that Gold is risky due to international events and price movements, True but this is a well known and understood asset for generations, so dont ignore it.

4. Nifty ETF and Gold ETF take care of equity and Gold allocation for your portfolio. No worries about stock or sector selection. But you need to be patient to wait for market corrections and declines to invest in Nifty ETF. During bad market phases where Nifty drops fast, your Gold will shield you to an extent and hedge your portfolio.

5. Once people are comfortable with Equity ETFs I recommend moving to real estate and other avenues that can provide capital appreciation, rental income as well as huge tax breaks. But real estate gains can be reaped over a long period of time, not in short while and its illiquid. One should keep these in mind when investing in real estate properties.

Dear Sir

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After 10 or 15 years, Value of 1 Lakh is equal to 10000 of today. So, ULIPS, MUTUAL FUNDS and is ruturns are worthless at that time.  Second, Gold value also goes on ups and downs. But Gold will gives some profit.  But Cost of Land will increases upto 5 to 10 times within short period.  Land will give more benefit in short term as well as Long term investments. Only thing is More carefull while purchasing Land (check NOC, local clearance, Legal aspects, etc.

Thank you Jyoti for your referral

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Never spend more than 70% of Wages(Salary)

Charity~10%

Active Capital(For profits)~ 10%(Part time Business)

10% Passive Capital:In terms of Stock/Bonds/MF(Compound Interest leads to Financially Independence)

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Good question Swati...I think everybody wonders how they should invest their hard earnings. Another way of investing money is the stock market. One can buy stocks in a company as an investment in the company. Stocks are shares in companies which can be bought by individuals or other companies. The stock market has always given robust returns of investments.

For example, a person can buy stocks in a company for $5 and the next day, the cost of the shares could be as high as $8 per share. This is a perfect example of 'making a killing at the share market'. The stock market returns as much as ten to twelve percent annually.

Thanks Swati. Yes it depends upon your needs, goals and priorities about the investment strategy. If you want to be a safe player and want a regular but limited return than you can go in for bank FD's or bank bonds or Postal Deposits. If you think that you can take a little bit of risk than you can go in for MF's. If you want insurance together with your investment than you can go in for ULIP's of Insurance companies. If you want fast money than you can invest in shares directly. You can invest in properties. You can invest in Art and Paintings. Investment in Gold is also one of the option. You can invest in antiques. So the options are many and varied. It is quiet possible that something which is best to me is not suitable to you. If is also possible that the best according to me is not the best for you. Because of the nature of investment, the risk taking ability and the amount required for investment.   

For ages Indians have been investing in Gold, which generally appreciates and one should keep it safely.  The investment in stocks is means taking the risk of the market ups and downs, real estate also has got its draw backs like the land being occupied by landsharks etc

It's good to make an investment into one's own education and if one has children into their education. This is an investment that is practically risk-free and grows in multiple, compounded manner.

Asset allocation normally to be done in % total asset market value. You can normally allocate (100-your present age)% in high risk-high growth assets like equities. The remaining % of assets can be destributed in low risk assets (like Debt based hybrid Mutual funds with good track records) and secured assets like bank FDs, RBS Bonds etc. Always remember not to invest at a time in bulck in high risk assets but invest in systematic and disciplined way. If you do not have regular monthly incomes, remember to keep atleast your two months requirement amount as liquid in Savings account. Decide you lifes milestones like marriages, educational, house building, health-care for family, Life insurance premiums and other scheduled expensed while planning. Any further clearification please ask me.