The real estate investments as we all know are of two kinds: one for self-use and the other for generating returns on capital investment. There are certain factors that drive the returns on investments. The objective of your investment, financial status, age, the availability of funds or your liquidity at a certain point of time, your risk taking capacity, and your investment period are the factors that impact your rate of return on investment.
Before making an investment, have a clear understanding of why the investment is being made whether it is for your children’s education, marriage matters, retirement plans or purchase of property in the long-term or for short-term goals like buying a vehicle or going on a dream trip. The objective is the first factor that helps clear the following factors.
The younger one is in age, more viable it is for the person to invest for the long-term. It is also to be noted that financial responsibilities towards aged parents, children, spouses, and family are less in the younger years. That means more savings in the early years can help one build a stable and thriving financial cushion. The organization of the financial stakes even in the later years can pay-off well if it is planned and executed properly.
Any kind of liability on your part whether home loans or EMIs on vehicles would pull back your ability to invest. It is wise to clear out any remaining debts first and then think about investment. After all, investment is risky as a lot of it depends on the market considerations. It is best to always have liquidity in your savings when it comes to investments. In case of untoward incidents, trends or market conditions, the risk-bearing capacity of a young person is more than others which makes it ideal for them to invest and learn what works for them.
It is almost like choosing from a platter of options with a wide range. Their willingness to take risks even in the volatile market conditions can help one prepare for long-term returns. All these factors put together makes up the fifth and the final point of investment timeline. So, putting money that you need in the near future into stock markets is a big time risk as the stock market is vulnerable to any piece of information that can affect the indices and make the stocks fall sharply. The equity investments, on other hand, can give more returns in the long haul which is ideally five years or more.
What are the popular investment windows in India?
The real estate, fixed deposits, and gold are the most popular investment options in India. The gold investments are considered as a safety valve against inflation as over a period of time, the return is in line with the rising price levels. The volatility also reduces if there is a mix of equity and gold investments in a portfolio. If the stakes drop like back in 2007-08, gold investments can maintain a good performance. Known popularly as passive tools to save and earn money, fixed deposits are certain lump sum amount of money kept aside for a period of time and earn interests. The real estate investment has always been considered a safe bet owing to their booming prices and their ability to recover over a period of time.