What do you mean by investment? What are the best investment returns?
Well, investment means different to different people. Some are interested in saving, some invest to reach their goal, or fulfill their needs, while others make long-term savings with the National Pension Scheme (NPS). Many people consider investing as quite a risk. Although it is, you must know when, where, and how much you need to invest to get the best returns. It is a common myth among many that to have more money you need to work more.
You see, working more, only drains you and detaches you from your family. What many people fail to realize is the money being saved in your fixed deposit might not yield as much as you might have hoped for it too. You can make more money with the same thing. All you need to know are schemes that will give you the best investment returns.
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Various Investment Options To Go For
When it comes to investment, it comes with a lot of options to choose from. You just need to look at the risks and the sectors that are best suited for you. But mind you, the best returns come with higher risks. You might want to know what are the best investment options to give the best returns before deciding which one to go with. Here they are;
- Mutual Funds – While many might ponder over the risk factor including this type, it is the investment that is bound to give you the best returns. This is a market-related investment that invests in debt, equity, stocks, money market funds, etc. The money invested in this type is funneled through its subtypes, that is;
- Debt Mutual Funds
- Equity Mutual Funds
- Hybrid Mutual Funds
- Public Provident Fund – This is the safest way to get the best investment returns, especially as they are backed by government support.
- Bank Fixed Deposits
- National Pension Scheme – In this, people invest to have a secure retirement with some good savings.
- Recurring Deposits
- Unit Linked Insurance Plans.
- Gold ETF
- Real Estate
- Post Office Monthly Income Scheme.
- Senior citizens Saving Scheme (SCSS)
What is a good rate of return?
Rates of return vary when compared with different types of investment schemes. For some investment types, these might be quite high while for others, these are way lower. Like a bank deposit might give you a maximum of 3% while a fixed deposit might give you returns somewhere around 5-7%. These are very low when compared with other best investment returns. While the maximum any investor can achieve as a good rate of return is 15%, it is very difficult to do so. A rate of return of 10% is considered quite good. Professional financial services.
A good rate of return is very important. Considering you have $10,000 savings and wish to invest it for 35 years,
- With a 2% rate of return, you will receive – $19,998.89
- With a 5% rate of return, you will receive – $55,160.15
- With a 10% rate of return, you will receive around $0.28 million
The difference between 2% and 10% might not be very significant, but the difference between 19,999 and 0.28 million is. Hence, a good rate of return is very essential for growth and making money says Marketech.
Business ownership, Including stocks
Investment for investors depends upon the purchase power or buying rate. The higher the buying rate, the higher the returns. Although the maximum returns that an investor can achieve even with the best investment returns in stocks are no more than 10%. It is impractical for any investor to go beyond 10% and that too when one does not consider inflation.
Inflation reduces the buying rate of investors by 2-3% per annum. Hence, they need to keep up their game and give 100% while buying and making people buy stocks. Moreover, an average of 10% per annum is still not right. Throughout the stock market history, the rates have always kept varying with an average of 8-12% with usually the higher limit in most of the cases.
Many companies take care of their employees by providing them with business ownership including stocks in their own company. This is under the employee stock ownership program. This does not necessarily have to mean that the company has the best investment returns in stocks. The employee stock ownership has some set terms, abiding by which leads to the stock ownership. There are certain things that every investor must keep in mind while doing business ownership including stocks or simply buying stocks of a company. These are;
- Keep calm when they earn good returns. This is mostly because the market is doing well.
- Be optimistic about the future is the stocks fall. When the market is not in a good state, you are bound to lose some money but being optimistic is your key in holding stocks for the long term.
- The average return of 10% is only received when you buy some stocks and hold them. You can’t just buy stocks and sell them within a few days or a week.
Keep Your Expectations Reasonable
You might have heard the phrase that you must keep your head low in the face of appreciation and stand strong in the face of fear, right? Well, that works just right for investment as well. It’s just that when some money starts rolling in, people have their hopes high and expect better returns for their investment. This is the market we are talking about. While we are discussing this some companies have lost many stocks while some are soaring high above. In this very unpredictable market, it is very important to keep your expectations reasonable and not have high hopes.
We asked a few financial bloggers for their comments on this and they all echoed the same sentiment, but Zachary from Greenery Financial said it best: “keeping your expectations in check is one of the most important aspects of investing, if you have too lofty of expectations you’ll begin to doubt your investment strategy before your strategy even has time to be right, ultimately hurting your returns severely in the long-term.”
Finally, an investment can be a very vast topic to talk about. But with a few key takeaways mentioned above, you are bound to do just right in the market. Don’t just keep your savings in a safe. Get into investment and make more money than you might have ever imagined. Come in, compare your risks, and get on with it. Make the money work for you.