Ways to Invest Money Wisely

The term investment means giving money to receive returns at a later stage. Investing your money is always a genuine concern for you as a salary in the bank account does not 'grow' even if you keep it there for several years. Some minor interest will just accumulate on it. Hence investment of some proportion of income is necessary. Life in the modern world has become increasingly difficult and a need to make indemnity provision is a must. Today the common man is concerned about three important things, one financial security throughout life, two kids education and well-being and three unanticipated expenditures in life.

Blame materialism, blame society, blame the modern culture, but the fact remains that we are scared and the fear, that we feel promotes us to ask the repeated questions, 'what are the best ways to invest small amounts of money', or 'how to invest money wisely'. As a student of economics and finance, I want to state some realities in front of you:

1. the amount that you earn is never going to be enough for you, hence curb temptation and wants, make compromises and adjust your expenditures
2. no investment is a gold mine, every investment has an average rate of return over investment, to get the advantage of a couple of dollars or percentages, make some simple rate of return formulas
3. now if you have to make an investment, you need to have a certain income and expenditure planning, hence again, make sure that you calculate , plan and stick to the plan

The psychology behind investing is deep and in order to get the gist of it better, you need to calculate three things, namely, how much you will have to pay per month, can you afford that much payment a lastly, how much will you earn per month.

Funds, Plans and other Securities
In the following funds, all you would have to do is invest on an annual and monthly basis and then enjoy the benefits. In many cases you will be able to invest more than prescribed, and the company will share the extra profit with you.

• Life Insurance: The first great option is a life insurance policy. When you invest make sure that the policy has a return on investment, which is regularly placed plus a death benefit.
• Annuity : An annuity plan is more over like the life insurance and if you chose to you will be able to control. You will also have the freedom to investment more than the installment, if you feel that the market is going to rise. Some annuities are subject to market risks.
• Mutual Funds: A mutual fund is a fund where the company shares all the profit with you and your funds are subject to market risks, though there is an assured sum of return.

Accounts and Deposits
There are several random accounts where you can just deposit money on a monthly and annual basis and let the interest on the sum grow. There are some tax benefits of many of these accounts with your deposits being totally tax-free in certain circumstances. There is also no lower limit for your deposit, though there is an upper limit that be set.

• IRA: The individual retirement account is an account where finances can be deposited on a monthly or annual basis, with the entire amount being tax-free. Problem is you can't withdraw the amount before you reach a certain age, though you can withdraw it with a penalty. Apart from that there are also some specific situations such as a medical expenditure where you can withdraw the amount without penalty. Advantage is that there is no lower limit for deposit.
• Payable on Death Accounts: A payable on death account is a similar one to an IRA and there is no lower limit, which makes it a considerably advantageous policy for many people. It's great way to invest for your family.

Market Based
Now there are some assured ways to invest money wisely, but you will have to participate in a specified market. Such investments are basically involve purchase and sale of securities or instruments and the function demands your daily attention. Apart from that, you are on your own in such a situation and bearing the probability of loss is your duty.

• Stock or Shares: The first option is stock investing, through stock markets, this of course requires total attention and you will have to keep an eye on the market everyday and dedicate at least an hour to the activity. There two ways in which you can make money, one you can make money by selling a stock that you purchased at a lower cost or you can just enjoy the dividend that is paid on an annual basis.
• Forex Market: The Forex market is also known as the currency market and it is again a bit risky to deal in such a market due fact that a single time investment is high and the returns are high, but the probability of loss is also high. Apart from that there is no annual divided in this market.
• Corporate securities: Apart from stocks, there are also several other securities such as debentures and asset backed securities that are issued by the companies. These securities tend to have a certain date of maturity when you can get back the investment plus returns. Alternatively you can also trade certain securities on the stock exchange.
• Stock Investments: There are certain stock related collective investment schemes where bulk stock investments are managed with the help of professional experts for a said period of time.

There are some substantial investment channels such as governmental bond investments, real estate or land investment, gold investment which have a sure shot return. The initial investment, however, is quite high.