ABC of Investment

The title of this article is quoted by Warren Buffett & this is a harsh truth in every sphere of our life. Most of the people in this world are working very hard to earn money for living a life full of happiness & joy. They wish to fulfil their dreams and imaginations. Money is the most useful power which can do almost everything in this world. Hence, they invest their savings in the expectation of handsome return. No one  will be happy in losing his hard-earned money in poor investment. The most common & big mistake we do in our life is nothing but investing our money as per advice of any person, broker or agency without any verification of their offer. Sometimes, agents or brokers intentionally involve their customers in poor investment plan for getting more interset or commission. They misguide their customer with fake promise for their own benefit & consequently, the investor loses his hard-earned money. A huge market-research is required for verifi

                   An investor succeeds only when he spreads his wealth & diversifies his investment in different options available in market. But, he should research several investment tools and apply his wisdom before making any investment. He should be very clear regarding his requirement & investment goal.                        Examples of few investment options which are popular in Indian market are  illustrated below....... 1) Savings account: Low-interest investment plan, roughly 4% Good option regarding easy & instant withdrawal Annul interest up to Rs.10000/- is tax-free 2) Fixed Deposit: Medium-interest investment plan with various slabs of interest Investment is locked for fixed term Any interest is taxable 3) Sovereign Gold Bond: Paper gold investment launched by RBI without transaction of physical gold Investment is locked for long term Return is tax-free Additional 2.75% of interest provided annually, which is taxabl

                     People enter the world of stock market in the expectation of big money in short time. But making money in stock market is not easy at all, rather an uphill task. Sound knowledge & understanding of market, huge research work, monumental patience & discipline - are the qualities of a successful investor.                                         Bull market is represented by a bull which attacks with its horn in upward direction. Metaphorically speaking, the investors have high confidence & stock price goes on increasing. Investors make profit after buying stocks at lower prices & selling at higher prices.                        Bear market is represented by a bear which attacks with its paw in downward direction. Metaphorically speaking, the investors have low confidence & stock price goes on decreasing. Investors make profit after selling stocks (which do not exist in his portfolio) at higher prices & buying at lower prices.

In the fast-moving world of renovation and modernisation, we should get in touch with the changes in financial field regarding investment as well as taxes. Frankly speaking, everyone should have minimum fundamental knowledge on investment and tax aspects in our country. This will definitely help us build a powerful wealth plan utilising our skills and resources. What is investment? Money we earn is partly spent and the rest is saved for meeting future expenses. To invest is to allocate money in the expectation of some benefit in the future. Need of investment Financial security Fulfilling financial goal Wealth creation Future emergencies Fighting inflation  Inflation Rate at which cost of living increases Inflation causes money to loose value Return Return on investment should be above inflation rate to ensure that investment does not decrease in value. If after-tax return on investment is less than inflation rate, then assets have actually decreased in