Getting To Know The Different Types Of Investments


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Financial planning is an important factor in any person’s life. While seldom do we think much about this till quite late in our life, knowing the financial tools can actually help you hack growth and turn your existing wealth into fortune. However, to do so, you need to know about the investment options available to you.

Today we will be checking all the major types of investment options, and how they can help you achieve your financial growth goals.

Know Types Of Investment Options Before Investing
Know Types Of Investment Options Before Investing

What Are Major Types Of Investment Options And Which Suits You Best?

Depending upon the income status, the modes of income, and the lifestyle of a person, an investment portfolio can be created. It is always a custom made portfolio designed to maximize growth with available options. You need to keep in mind that the combination of types of investment options that worked fine for your friend might not be suitable for you. So, before you take the leap, know your options in depth.

Insurances

Almost every person is well acquainted with insurance policies, and probably every sane person has at least one to his/her name. If you are yet to make any investment, you can begin with the insurance. Life insurance and health insurance are two most common and important ones in this segment. However, we will be focusing on the life insurance, since it comes with return plan as well. You will find that there are three major options – term life, whole life, and universal life insurance, segmented based on duration and coverage. The purpose is more or less the same. It provides financial support to your family upon your death, and can have returns feature at the end of the tenure, making it a savings option as well. Premium depends upon the policy, and generally there are tax benefits included.

Retirement Plan

This comes right after insurances, and is quite popular among the salaried individuals. Not every job comes with pension scheme, which is why, investing in a retirement plan is a smart way to ensure that you will not be facing financial crunch during your old age. You will have to decide depending upon your retirement lifestyle, and you can decide the premium to be paid. This investment generally comes with tax benefits.

Bank Products

This includes savings deposit, recurring deposits, fixed deposits, and other such options available from the banks and credit unions. These are easy to invest in and does not include risks. They are also not the high return options, but a security that is promised to you after certain time period.

Investment Funds

Here comes the option that can actually make your money grow, and thereby comes with inherent risks as well. Mutual funds, exchange-traded funds, close-end funds, are included in this segment. The idea is to accumulate wealth from multiple investors and investing as per strategy. Since the trading happens in the market, there is inherent risk involved. However, the return is also quite high when done right.

Stocks and Bonds

These are direct trading tools wherein you invest on a company or in a corporate structure. Each comes with numerous rules, noted in the fine prints. You need to read them carefully before making any investment. Also, you will need strong knowledge about the market to ensure profit. While risk is high, return is even higher.

Whichever investment option you plan to choose, take decision only after reading the entire terms and conditions documents. If you are new to the market, it is best to take help from a reliable and reputable broker.

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