Women across the world have a fantastic ability to save with persistence. Most housewives, tend to save 10-25% of their allotted monthly expenses.
But, once you have saved the money, what’s next? Will you keep it in your locker? Or will you invest? The money needs to be invested in different asset classes to diversify the risk, generate high returns with capital preservation as a priority.
This basic investment diversification will help you to create wealth over a longer period of time. If you do not invest, the money will be depreciating in three ways – not earning interest income on principal investments, not earning from returns generated from principal investments and inflation cost.
Let’s assume that you were born in the year 1979 when Sensex was born. Now we have passed 38 years. In 1979, if your father would have invested Rs 1 lakh in fixed deposits (FDs), Rs 1 lakh in gold, and Rs 1 lakh in equity market, what would be the current market value of these?
As on today, the value of your FDs would be around Rs 22 lakh, gold investment will be around Rs 38 lakh and the Sensex investments will be around Rs 2.53 crore and Rs.4.75 crores (with dividend reinvested to same stock). The 38-year return is as follows- FD: 8.5%, gold: 10.5% and Sensex: 16.15%. Even if you would have invested Rs 1 lakh equally in all three asset classes, your returns would have been close to Rs 1.03 crore. The blend of three products gave a return of 13.3%.
Moreover, items available 38 years ago are much costlier now, due to inflation. After adjusting with inflation, returns – FD: (8.5-7.5) 1%, gold: (10.5-7.5) 3%, and Sensex: (16.15-7.5) 8.65% (10.65% including dividend yield).
Investing your money is equally important as saving. Ignoring inflation cost while planning your investments, can lead to losses. Invest in the stock market with the help of a good financial expert, who will help you to invest wisely, beat inflation, and create wealth in the long term.
TIMELY MOVE
- If you do not invest, the money will depreciate over time
- Invest in asset classes like gold, fixed deposits and equities
- Ignoring inflation cost while investing can lead to losses
The writer is head products, Anand Rathi Preferred Services
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Investments")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}