0Different investment avenues are available to generate financial wealth and provide you financial freedom. Let’s learn these concept below.
(Non-Market securities) In other word, Non-marketable securities are those securities which cannot be liquidated in the financial markets.
Some common examples are given below:-
- Bank Deposits
- Post office deposits
- U.S. saving bonds,
- rural electrification certificates
- private shares
- state and local government securities
- federal government series bonds
(Equity Mutual Funds) An equity fund is a mutual fund that invests principally in stocks. It can be actively or passively (index fund) managed. Equity funds are also known as stock funds.
Some specialty equity funds target business sectors, such as health care, commodities and real estate, Blue chip scrip, Growth scrip, Income scrip, Cyclical scrip, Speculative scrip
(Balanced Fund) In other words, Balanced funds are geared toward investors who are looking for a mixture of safety, income and modest capital appreciation.
Examples: DSPML Balanced, FT India Balanced, Kotak Balance, Prudential ICICI Balanced.
EPF(Employee provident fund) A provident fund is created to provide financial stability and security to elderly people. A person begins contributing to this fund when he/she starts out as an employee.
The contribution, in most cases, is on a monthly basis. The purpose of an EPF is to help employees save a part of their salary every month to be used when the employee is no longer fit to carry on working i.e. when the employee has to retire from service.
Both the employer and employee contributes to the EPF at a rate of 12% of the basic salary and dearness allowance (if any) every month. The total contribution to the EPF is thus 24% per month.
PPF (Public provident fund) Public Provident Fund (PPF) scheme is a popular long term investment option backed by Government of India which offers safety with better interest rate and returns that are fully exempted from Tax.
A minimum yearly deposit of Rs. 500 is required to open and maintain a PPF account. A PPF account holder can deposit a maximum of Rs 1.5 lacs in his/her PPF account (including those accounts where he is the guardian) per financial year.
(Bond) A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.
Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities.
Owners of bonds are debt-holders, or creditors, of the issuer.
(Real estates) In simple terms, Real estate is the property consists of lands and building.
It is up three categories based on it’s used: residential (undeveloped land, houses,
condominiums, and town-homes), commercial(office buildings, warehouses, and retail store buildings) and industrial( factories, mines, and farms).
(Foreign or overseas mutual fund) It is a mutual fund, which is invest in companies located outside of its investor’s country of residency.
The difference is that a global fund includes the entire world, while an international fund includes the entire world excluding the investor’s home country.
(Money Market) the money market became a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. Trading in money markets is done over the counter and is wholesale.
(Derivatives) A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, index or security. Common underlying instruments include: bonds, commodities, currencies, interest rates, market indexes and stocks.
Futures contracts, forward contracts, options, swaps and warrants are common derivatives.
