It’s quite common to find people who’re adept at earning, but desire to plug in only little effort to invest and grow simultaneously, what they make.
Everyone knows and understands the value of saving. However, recognising and actually channelising it properly are two different things, with the latter demanding quite some time and energy.
If you are a person who’s rather financially uninvolved, this article can provide you with some quick investment ideas you can benefit from. But, before that let’s understand how you should plan on your investment amount.
How to Decide How Much to Invest?
A quick and simple way to make this decision is to swear by the 50/30/20 budget as popularised by Senator Elizabeth Warren. As per the theory, you should attempt to allocate your disposable, after-tax income as 50 percent on needs, 30 percent on wants and desires and the remaining 20 on investments.
This, of course, is not a one size fits all approach, for someone in the early stages of their career may not be able tomanage that much saving. Your goal ideally should be to plan your savings in a way you’re able to achieve some financial freedom and contribute as much to your investment as possible to achieve that.
What Are the Good & Safe Investment Ideas That Don’t Take Up Time & Effort?
Following are some of the safe and meaningful investment ideas that cater to your financially uninvolved disposition. Let’s take a look:
- Deposits with Banks
Even though an extremely conventional option, bank deposits as an investment idea are valuable due to liquidity and great security aspect.
As such, fixed deposits can be one of the safest investment options with immense flexibility on the amount you wish to invest. It is a safe option and does not require you to consider the effects of risks associated with the financial market.
In fact, to make things more convenient and automated, you can also choose the Auto Sweep facility. This allows interlinking of your savings bank account with an FD account. The process facilitates automatic transfer of money from savings to the FD just as it crosses a certain limit and earns relatively higher interest too.
Even though banks pay little return today, with the interest income being taxable, having some money invested with them is important.
- Market Investments
Market investments usually pay out more than the banks if chosen rightly. As such it’s advisable to go for mutual funds or ULIPs, for they channelise the money in a diversified pool of assets as compared to riskier individual stocks. Systematic Investment Plans (SIPs) make investing in mutual funds effortless with auto deductions at the decided frequency.
This additionally helps in lowering down the average purchase cost and eliminates the need to time market entry. As for other advantages, it induces a kind of forced saving and alsomakes you financially disciplined. Other good market options include liquid funds. They are quite safe, less risky than mutual funds, easily cashable and pay higher than a bank deposit. However, the possibility of earning more always rests with equity-related funds.
- Government Investments
Government deposits rank among the safest and the relatively hassle-free class of financial investments. They are most secure,and once you have invested your money with the state, you can sit back with peace of mind, and be assured of the payout on maturity, with the no effort needed in the middle.
In terms of options, there are taxable bonds issued by the RBI, which come with a sovereign guarantee. They have no investment ceiling and the minimum period for them is just 6 years.
The Post Office Time Deposit is also quite beneficial offering an interest rate that is higher than bank deposits. POTDs are available for tenures of 1, 2, 3 and 5 years. Another meaningful consideration includes the 5-year NSCs (National Savings Certificates). Theyare exempt from taxes too.
- Insurance Policies
Insurance policies are extremely important, and something you should never miss to live anxiety-free and secured life.Any life insurance policy, like online term insurance,requires you to decide on an amount and pay a fixed premium towards it to be insured against an unfortunate situation.
This culminates a regular saving habit, protects from contingencies and also pays out in lump sum on maturity. Since premium payments towards online term plans can be automated, their maintenance and involvement hardly demand your time. Additionally, online term insurance plans make you privy to enjoy benefits of deduction in your regular taxable income alongside growing your money and keeping you secure.
With these quick and effective ideas that only ask for little time of yours, you can safely invest your money and work towards creating a stable passive income that can slowly help you work towards financial independence.