Investing is something that everyone wants to do but does not understand where to start. Investing is like a seed that you sow today and reap its fruits in the future. Often people are confused about where to invest 10 lakh rupees. Everyone has different objectives regarding investment, but everyone has one foremost goal - financial security.
Before investing, there are many things to consider, and it is more important when investing Rs 10 lakh. 10 lakh rupees is not a small number, so one should approach investment wisely.
First of all, find out your goal behind investing 10 lakh rupees and how long you want to put your money into it. When you understand this, then you can choose the correct financial instruments. Along with this, you have to know your risk-taking ability. In low-risk investment options, you will find options like FD, PPF, and NPS, whereas good investment plans usually include investment options like the stock market, real Estate, and bonds. These investment options carry high risks but, at the same time, provide high returns. In a low-risk investment plan, you get consistent returns, but the returns you get are very less.
What is the best investment option if you are unfamiliar with the market or lack understanding? And where to invest your 10 lakh rupees, then read this blog thoroughly.
First, you need to balance the risks of the investment to ensure consistent returns. This can be done by choosing a hybrid fund portfolio of debt, money-market, and equity funds. In addition, investments in gold, mutual funds, and unit-linked insurance might be wise choices for people who wish to reap high returns while also taking risks.
Lump Sum Mutual Fund
As you know, mutual funds allow you to invest in stocks of companies and equity and money markets. There are many mutual funds; you can choose the best mutual fund according to your risk appetite and returns. Lumpsum Mutual Funds are the riskiest option for investment. Even though the returns are higher, there is always a risk of losing your money if the fund does not perform well. Every movement in the market has a significant impact on these funds. If the market picks up, you can enjoy very high returns of Rs 10 lakh.
You can use an MF calculator to estimate lump sum investment returns. It will help you to understand how long you can achieve your investment goals. For example, if you make a lump sum investment of Rs 10 lakh and expect a 12% return per annum, your invested amount increases to 54.7 lakh over 15 years.
An equity portfolio can also play a critical role in meeting your investment goals. Since you will get so many options in an equity portfolio, it will be easy for you to choose the right portfolio. You can invest a stock of Rs.10 lakh together by assessing the past performance of the stock and the market capitalization of that company. Just keep in mind that there is a high risk involved. But if you want to earn good returns with high risk, then you can go with this option. You can calculate your investment by going to the company's profile.
Unit-Linked Insurance Plans (ULIPs)
Unit-linked insurance plans are also known as investment insurance plans.
ULIP investment plan provides insurance protection for its investors, and your money is invested in debt and equity funds in the market. Investors are also given a variety of options in this. They can choose ULIP options according to their risks. The most important thing is that if some of your funds are not performing well enough, you can switch your funds in between.
You can earn decent returns through this fund. The policyholder is given an amount by adding the accumulated value and returns together at maturity.
Using the ULIP calculator, you can estimate the scheme accurately. For example, if you invest a lump sum of Rs 10 lakhs in this fund for 15 years with a 10% return, then after 15 years, the value of your invested amount will be around 42 lakhs. Instead of investing all at once, you have the option of investing annually if you want.
Sovereign Gold Bonds (SGBs)
Investing in gold can be the best option for investment. Undoubtedly, investing in gold is not a new thing for Indians. But do you know that most of these people have seen gold only in the form of jewelry? People buy gold for jewelry by investing a good amount of money together, but it does not benefit them; on the contrary, sometimes they lose. Moreover, jewelry costs money to maintain, and "making charges" are also applicable and can range from 6-14%. Therefore, a better solution is to invest in gold coins.
Now you can buy gold in paper form and invest in it. Sovereign gold bonds (SGBs) are gradually gaining momentum in India, mainly because of the risk of physically holding gold, and SGBs are more cost-effective. Sovereign Gold Bonds are issued by RBI, which you can fully trust. Here you get interested at the rate of 2.5%. It has an 8-year lock-in duration. However, you can sell it in the secondary market if you need the money.
Gold Mutual Fund can also prove to be a good option. Investing in gold through Sovereign Gold Bonds and Gold Mutual Funds is a smart investment option, and you can easily buy and sell.
Real Estate is a type of investment that is always in demand. Investing in real Estate was also beneficial in earlier times; it is equally beneficial today. When making real estate investments, there are various things to consider. Even if a piece of luck favors you, then you can earn the best profit among all the investment options by investing in real Estate.
But the risk in real Estate is also very high. Sometimes there can be a fall in real Aestate, but if you are ready to invest for a long time, you will get the benefit in the end. Most real estate investment is not for personal reasons but other reasons, so this investment in India is considered quite safe. Moreover, you can generate a consistent income by renting out the real Estate you invest in. Today, if you invest Rs 10 lakh in real estate property, it can double in the next few years.
When investing Rs 10 lakh, you should choose the best investment plan wisely. Since you will find many investment plans in the market and many experts will give you advice, the final decision should be yours. When there are so many investing options, it can be challenging to select the ideal one. Given below are five factors, keeping in mind that you can choose the best plan:-
- Cost and value
- Since your investment amount is huge, in whichever company you want to invest in shares, then before going ahead, look at the performance record and returns of that company for the last 10 years. These will help you to choose the effective investment option.
- Never invest based on prediction. Use a trading approach and keep a constant eye on the market.
- In Mutual Funds and ETFs, you get access to value investing techniques. Through this, you can determine which shares are being sold at the lowest price and which are likely to lose value. So it saves your research time.
- If you want to play the big game in the investment world, come up with Long Term Investment. This means to say that whatever stock you buy, do not sell it when there is slight volatility in the market. The only person successful in the market is the one who can predict future returns accurately.
Important Note:- Often, people see the stock market as the best option for investment. Stock market experts also recommend investing Rs 10 lakh in lumpsum stocks only. Arguably, no doubt that investing this money in the stock market can make a good amount of money. But one of the world's most successful investors, Warren Buffett, once said, "don't keep all your eggs in one basket." The stock market world is not very easy and stable; there are always ups and downs. You can also invest your 10 lakh rupees wisely in different options instead of putting a single investment option. It also helps reduce your risk and can potentially be quite profitable for you.
I hope you got your answer: where to invest 10 lakh rupees? If you have 10 lakh rupees and you are looking for the best investment option, then given above are some investment options that you can consider. There is a saying often spoken in us here "Live in the present." This saying is true to some extent, but it is wrong from the investment point of view. Having a plan for the future is not a bad thing. As we all know, that investment has emerged as the best option to create wealth. Investing your savings account money is better than letting it sit idle.
Sure, there may be some risk fear in investing, but there is always victory over fear. If you want decent returns, then you have to take some risks.