Date Sensex 18737
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WEB OF INVESTMENT Followings are some investment avenues available for general public. Sr.No. Description 1 Flats/ Shops/Land 2 Bank Fixed deposits, Post office scheme, Company FDs etc. 3 Share market, SIP, Bonds etc. 4 Insurance, Mediclaim 5 Education, professional degree etc. 6 Health & Diets, family, society. Before taking any advice from a person we must check that he has the experience of at least 20 years in the investment field and he has invested his own hard earned money, so that he can talk with the gravity of investment. Year Flat rate in Bank FD Sensex BSE Gold rate If Rs. 10,000 Virar per sq rate per 10 gm deposited in feet PPF it would be 1998 Rs.650 12 % 3600 4000 10000 2004 Rs.850 6% 5800 6000 20000 2007 Rs.1600 8 13000 9000 2008 20000 2009 10000 20011 Rs.3800 8 20000 20000 2013 Rs.4500 8 19000 29000 39000 2018 Rs.5000 8 39000 39000 2020 Rs.5000 6% 37000 50000 72000 Approximate 7.6 times 10.27 times 12.5 times 7.2 times increase Date Sensex 14 November 2001 3180 4 Nov.2002 2982 25 October 2003 4698 12 November 2004 5997 01 November 2005 8073 21 October 2006 12623 9 November 2007 18737 28 October 2008 9045 World financial sub prime crisis 17 October 2009 17223 5 November 2010 20852 28 October 2011 17805 2017 30000 2020 on 8.10.2020 40000 Gold Rate and SENSEX in Year 2020 Year Gold rate Sensex Rs/10 gm January 2020 41000 40943 3 April 2020 43936 27590 24 Feb 2020 44472 40363 15 May 2020 47067 31097 31 July 2020 53743 37606 7 August 2020 56254 38040 30 September 50442 38067 2020 Generally speaking, Investment in flat and PPF are almost same but in flat investment you got monthly rent also. Investment in share market shows 10.27 times increase but it is in sensex only and people purchase different stocks and their return will be minus 100 % to 10,000 times or more depending upon the luck that which stock they choose to buy,hold and sell . Similarly investment in gold with sizable amount with patience is also not easy for general public. So rightly it is said that don’t put all eggs in basket but diversify means that you should make investment in different products like residential, commercial property, share market, Bank fixed deposits and Gold also. So that if one investment is lagging other will be in advance stage. You can invest more in the field where you are more comfortable. From above it can be seen that in 22 years flat, share market and gold has given roughly similar returns earn profit by investment requires great skill and patience. Now let us start discussion about investment in property. 1) Investment in purchasing flat or shop requires a lot of money. Banks give about 80 % of flat cost as loan for eligible purchasers. Interest rate for purchasing flat is also less. 2) Banks give about 50 % of cost of shop cost and rate of interest is more. 3) It is always better to deal with reliable broker for purchasing the property because they charge commission but it is better to pay happily instead of trying to deal alone because they will help you in selecting the good property as per your requirement and will help in closing the deal with you. 4) Be frank with your reputed broker only. 5) Select the property as per ypur capacity only and don’t stretch too much because ultimately amount has to be paid by you and only you only. 6) Banks, friend will give the money as loan only. 7) Your financial conditions may improve , then very good but if deteriorate then you and only you have to face the financial trouble and there are the case that people have to sell the property in loss and there are plenty such people waiting for such type of opportunity. Table showing the approximate flat cost, down payment, loan eligibility, EMI and monthly rent return . Flat Flat Down Loan Rate of Monthly Approximate Monthly salary size cost in payment from interest EMI in rent reqd in Rs. ( rs. lakh from bank Rs. Approximately) personal in Rs. saving lakh 1 30 6 24 7 % 18607 Rs.7000/ per 31000/ BHK 8 % 20075 month 34000/ 9 % 21593 36000/ 2 50 10 40 7 % 38765 Rs. 10000 per 65000/ BHK 8 % 41822 month 71000/ 9 % 44986 76000/ Banks give loan generally 80 % cost of flat and monthly EMI should be 60 % of salary generally. So from above it can be seen that who have salary of Rs. 30,000 per month should choose 1 BHK and those having monthly salary of 70,000/ per month should choose 2 BHK .Flat should be purchased for self occupation and if only investment has to be done then shop can be preferred. Now let us start discussion about investment in share market. 1) Share market is so vast that it is said that Sky is the limit. 2) One thing I could not understand after studying the share market for so many years that when one fund manager having degree from IIM Ahmedabad sells shares of a company and those shares are bought by other fund manager who also has degree from IIM Ahmedabad. On top of that both fund managers have been taught by same professor . I think it is because investment is not only science but it is also the game of heart also. So people of brave heatr win having equal knowledge of investment mathematics. 3) It happens in every business also. In the same business some shine and some become bankrupt. 4) Investment in purchasing shares through Bombay Stock Exchange ( BSE ) or National Stock Exchange ( NSE ) is very simple after opening Demat accounts. Shares can be purchased for any amount of say less than Rs.100/ also and upper limits can be lakhs and crores. 5) Investment in mutual fund is also very simple and by investing in one mutual fund one is able to invest in many companies. Mutual funds are managed by highly qualified Fund managers which earn lakhs of rupees every month as fee to manage mutual fund scheme. SIP ( Systematic Investment plan )- To purchase every month units of mutual fund is called as SIP . This is at present very famous way of investment in stock market. So now let us come to the basic of Investment. 1) What is Investment? Investment is a process which ensures safety of capital and promises reasonable rate of return. See, here safety of capital is most important in investment and you can expect a reasonable rate of return only. So it is said that where there is very excess rate of return, do not walk away from there but run away from there because there will more chances that money will be lost. So what to do? 1) Do you Job whether as a salaried person or businessman. 2) Take care of yourself, your family, your health first and then save some money for future requirements. 3) Take insurance, Purchase house if you do not already have which you can afford because house is not a asset but it is a liability but house is a must. 4) Anything which brings money in your pocket is asset and anything which takes away money from your pocket is liability. In simple words, if you spent the money on anything it must give you reasonable return and from here only the sea of investments starts. INURANCE 1) Why we need Insurance ? Take insurance for yourself, your family, your vehicle or anything which you feel is must. Take mediclaim for yourself and for your family members because you cannot take it when it is required. It has to be taken in advance. Pray to God that you do not need to claim it and keep yourself healthy. 2) How much Insurance we need ? First thing is to check how much cover is needed and how much one can afford through insurance. 3) What we should examine before we take Insurance policy. Pl check that insurance agent is in your locality , so that you both are in touch when needed. Agent will be very helpful when something goes wrong . He will be a friend in need. Firm should be strong and many people prefer Govt. firms for insurance as extra safety. What is PF and PPF? Provident fund/ Employee provident fund for salaried class and Public Provident Fund for general public and salaried persons also can open PPF account in designated banks. It is total Government scheme. Difference between saving and Investment. After expenditure what is left is saving and this saving will be very useful in future for so many things. Now this saving in the forms of cash can be kept at home, can be kept in saving bank with very little rate of interest or can be kept in fixed deposits of bank, post office, purchase insurance/ mediclaim, PF/PPF , purchase car, purchase flat, purchase shop, purchase books, purchase gold/silver/diamond , spend money for education, healthy diets etc and so many other such things. And people call it as investment. In broadway speaking, when people purchase flats, shops, Gold, silver, share of companies, start SIP ( Systmatic Investment Plan ), purchase units of mutual fund call it as a Investment. Innumerable books are available on investment in every field. Public interest in share market has reached to a such level that no principle of any book can be recommended for general public.