The Top 6 Options to Maximize Your Wealth as a Salaried Person
The Top 6 Options to Maximize Your Wealth as a Salaried Person
As a salaried person are you confused about the best options for investing your money?
If you are thinking, “What investments would give me the best returns? Does it help me with saving taxes? What are the risks? What are the intricacies involved in managing and growing my hard-earned money?” We have listed for you 6 investment options that you shouldn’t ignore.
- 1. Bank deposits
One of the simplest and safest ways to grow your money is by depositing it in a bank. Banks offer a wide range of deposit accounts that pay you interest.
Under fixed deposit or term deposit, you can put in a part of your salary for a certain period. At the end of the period, you get it back with interest.
As you can see, the risk of losing your investment is very less. As long as your bank is around, you’re sure to get your money back!
The downside of bank deposits: the interest that you get is pretty low. This can be a big concern especially if inflation — the price of whatever you want to buy, is on the rise.
What if prices increase at a rate higher than your rate of interest? In such cases you’re in reality, losing money rather than beating inflation.
So, people usually use these for short-term investing, say 3–5 years. The aim is to have cash that you can access readily.
2. Government Bonds
Government bonds are great risk-free investment vehicles for salaried people.
What are government bonds?
Well, the government needs money to run the country and carry out its various initiatives and projects. So, it borrows from people. How? It issues what are known as bonds.
When you buy a bond, you’re lending a sum to the government for an agreed interest rate. The government will return your cash at regular intervals. At the end of the bond period, you’ll have collected your entire amount plus interest.
You need to check if you can invest in bonds in your country. The downside of bond investments is again very low, albeit safe, returns.
3. Mutual funds
Mutual funds have now become the go-to option for a lot of salaried people. Mutual funds are riskier than bonds and banks but are a lot safer than investing directly in the stock market.
Here, instead of buying shares of a certain company, you give your money to a fund manager who picks an assortment of stocks for you.
Now, in case the company whose shares you own does not do well or closes down. You take a much smaller hit because only a portion of your investment is affected while the rest of it may be doing well.
Mutual funds tend to sway to market trends but offer much higher returns than banks and bonds.
4. Foreign currencies
This may not be too popular with the salaried population. But it’s a great asset class that you should look into.
You surely must’ve noticed how the currency of your nation fluctuates against the currency of another. It’s on the news every day. Why not take advantage of this to grow your money?
The way to do this: you buy the currency of a country that’s likely to go up and sell it off once it does! You make a neat profit.
To buy foreign currency, you could just go to your bank. Or you could check out currency converting agencies, and travel agents or even do it online.
A tip you could consider here: investing in the US dollar (and dollar-based assets) may be a good idea. This is because over the last 100 years or so the US dollar has been a strengthening currency, making it a safer option.
5. Insurance investment funds
These are insurance schemes that in addition to offering you insurance, invest part of your money into other growth instruments. So, you’re not only insured but also get returns on your payments — best of both worlds.
A lot of salaried people go in for options like this. There are a host of domestic and international companies that offer such policies. However, you may not find large differences between the options offered by these firms.
Also, some people believe that insurance investment funds are somewhat mediocre because they neither offer great insurance covers nor are good investment vehicles.
6. Alternative assets
Alternative assets like private equity, hedge funds and private loans have always been the preserve of the hyper rich.
But, thanks to the digital age and blockchain technology, you can now invest in a new set high-risk high-return assets like peer-to-peer loans, crowdfunds, cryptocurrencies and NFTs. As these are risky asset classes, you should apportion only a small amount of your money into the same.
NFTs for example, are becoming hugely popular, so popular that Collins Dictionary named “NFT” the word of the year 2021. This just means that NFTs are coming into mainstream adoption. That’s why these need to be a staple in your investment suite.
NFTs have always been popular in the gaming domain for ages. With gaming devices like Playstations and smartphones, gamers can do paid upgrades to their games and also buy things like game characters and character skins online. As you can see, even though these’re plainly digital they still cost money.
NFTs are very similar to this. Here, you invest your money in digital art, videos, music etc. Access to and ownership of these assets is given through blockchain.
But, unlike game purchases, you can trade these items for a profit on an NFT exchange. That’s what makes them an investment option. Considering their high-risk high-return nature, see how much money you can afford to play with and go in for them.
At Crowd Candy, you have the opportunity to invest in shares of US companies in the form of NFTs. You benefit because you’re investing in dollar-based assets.
Additionally, the NFTs are crowdfunding the company of your choice. The advantage: your money is not subjected to the ups and downs of the economy like in the stock market. So, you’re cushioned against economic downturns.
For as little as $100 per month, you can start building a decent portfolio of assets that you can sell anytime you want.
Written by Sherin Ann Thomas