As per the Global wealth report 2021, edition 12, there is continuous growth in wealth. Global wealth increased by 7.4 %, and records raced high for wealth per adult with USD 79,952.
At the beginning of 2020, due to the covid 19 pandemic, there was a negative impact on GDP, which impacted the household wealth and financial markets. Global wealth per adult had fallen by 4.7 %. Thanks to the immediate action from the government and central banks, the second half of 2020 experienced a rise in the financial market.
Global high net worth individuals increased to 7.8%, and their wealth expanded to 8% in 2021. United States, Japan, Germany, and China proudly hold the four topmost positions of high net worth individual population. (courtesy: Capgemini's world wealth report 2022).
India's wealth management industry is at drastic change. The affluent middle class is expanding. Wealth management is no more restricted to HNI's and UHNI's (ultra high net-worth individuals). Also, India will be home to 166 billionaires by 2022. It stands to be the World's fifth largest economy; this illustrates at what level Wealth Management is crucial for India.
Investment is an essential aspect of wealth management.
Warren Buffet, one of the top investors and the seventh wealthiest person in the world, rightly quoted, 'Never depend on a single income, make the investment to create a second source.
Investments primarily aim to expand your wealth to fulfil your goals.
Most investors look for an investment plan that gives maximum returns with the least risk. They select the top plan as per their risk desires. Here are the best 6 investment options in India that investors can look upon to climb their financial goals.
- Direct Equity: These are the direct investments done by the investors in the stock market wherein the company shares are bought. The best side of this is high returns and long-term growth. Although it stands up with high risk as it is market-linked, having critical knowledge of the stock market can save you from the risk.
Mutual funds: Potentially higher returns can be expected. However, they are linked to the market and involve low to high risk. Here one can claim for tax deduction when opting for Equity linked savings schemes. Also, investing in debt mutual funds can benefit in terms of indexation. A unique feature of this investment is you can start investing with less money, from rupees—500 per month, with SIPs (Systematic investment plan).
Bank Fixed deposits: This channel is safer for investing comparatively. It involves investing your money for a fixed period with guaranteed returns with a fixed interest rate. Its flexible tenure and easy liquidation make it more comfortable and popular in India. However, FD's liquidation in tax savings is impossible before maturity.
National Pension Scheme (NPS): This scheme is brought up by the Government of India to help its subscribers with a regular income after retirement. These can be made into two accounts, Tier 1 and Tier 2. Wherein tax benefits are obtained from Tier 1, which is compulsory. Tier 2 does not have any tax benefits and is not mandatory.
Public provident fund (PPF): The Public Provident fund rates are fixed by the Government and can change every quarter. It is a tax-free investment. The total time interval for maturity is 15 years; however, after completing six years, partial withdrawal can be done. Additionally, it can stand up as security to avail loans.
Post office saving scheme: One of the oldest investment schemes initiated in India in 1854, it is very popular for its guarantee and simple process. The Government backs it with no risks involved. Some of the schemes offer tax-saving advantages.
Investing not only expands your wealth but also provides financial stability for the future. With the best plans listed above, it will be helpful to choose wisely the one benefit for you.