Inflation:
Its the big or the biggest devil eating in to our savings. Any plan to invest and save for future has to be planned keeping inflation in mind. At a very basic level inflation means increase in price. It could be on account of food , real estate, health or education. The cost to avail food, provisions, transport, property and education etc eventually go up due to inflation. To ensure that our purchasing power remains on par or even better than today, we have to overcome inflation factor.
The best investments that grow with inflation is equity , real estate and gold. I would rate them in the order:
Equity
Real Estate
Gold
Equity:
As long as you have bought your security at the right time and are willing to wait for decent time period, it should fetch excellent returns. Equity investment is always [100 - Your Age].
That is if your are 30 years of ager. Then you can maximum invest 70% in Equity.
Real Estate:
Real Estate represents two asset class investments. One is apartment and the other is land. Of the two, as an investment I am more comfortable with Land. The trouble with apartment is depreciation. Land on the other hand does not depreciate but only appreciate.
By the way if you are buying an apartment to stay it cannot be termed as an investment. Buying apartment for investment purpose is tricky as your income generation would then be purely from Rental resource. In case you wish to sell your apartment , then the rate fetched would be based on depreciation. Since I am here referring to long term investment here to beat inflation, people who trade on apartment do not qualify. That is people who buy apartment in the launch phase and sell later after completion.
Land on the other hand appreciates in the long term. The issue here is approvals and encroachments. You need to take care of these two issues.
Gold:
In 1992 cost of 1 gram gold was 300 Rs/Gram . After 20 years, today it is 2700 Rs/Gram. So the price has gone up by 8 times or 800%. The only problem here is the fact that the dramatic rise is a recent phenomena. In 2002 the price was close to 700 Rs/Gram. So from1992 to 2002 , Gold appreciated by 120%. From 2002 to 2012 it has appreciated by 285%.
The best practice here is to buy in a systematic manner. Do not buy everything in one go.
Its the big or the biggest devil eating in to our savings. Any plan to invest and save for future has to be planned keeping inflation in mind. At a very basic level inflation means increase in price. It could be on account of food , real estate, health or education. The cost to avail food, provisions, transport, property and education etc eventually go up due to inflation. To ensure that our purchasing power remains on par or even better than today, we have to overcome inflation factor.
The best investments that grow with inflation is equity , real estate and gold. I would rate them in the order:
Equity
Real Estate
Gold
Equity:
As long as you have bought your security at the right time and are willing to wait for decent time period, it should fetch excellent returns. Equity investment is always [100 - Your Age].
That is if your are 30 years of ager. Then you can maximum invest 70% in Equity.
Real Estate:
Real Estate represents two asset class investments. One is apartment and the other is land. Of the two, as an investment I am more comfortable with Land. The trouble with apartment is depreciation. Land on the other hand does not depreciate but only appreciate.
By the way if you are buying an apartment to stay it cannot be termed as an investment. Buying apartment for investment purpose is tricky as your income generation would then be purely from Rental resource. In case you wish to sell your apartment , then the rate fetched would be based on depreciation. Since I am here referring to long term investment here to beat inflation, people who trade on apartment do not qualify. That is people who buy apartment in the launch phase and sell later after completion.
Land on the other hand appreciates in the long term. The issue here is approvals and encroachments. You need to take care of these two issues.
Gold:
In 1992 cost of 1 gram gold was 300 Rs/Gram . After 20 years, today it is 2700 Rs/Gram. So the price has gone up by 8 times or 800%. The only problem here is the fact that the dramatic rise is a recent phenomena. In 2002 the price was close to 700 Rs/Gram. So from1992 to 2002 , Gold appreciated by 120%. From 2002 to 2012 it has appreciated by 285%.
The best practice here is to buy in a systematic manner. Do not buy everything in one go.
Thanks allot.
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