More important than earning money is how to save the earned money and where to invest it. Many times news comes in the news paper that the company absconded by taking money by bluffing the defense person. Many defense persons also remain in the target of Multi-Level Marketing (MLM) companies. Some earn money in it, but most of them suffer heavy losses. The question arises where should the defense person invest his savings. Is it safe to invest in mutual funds? Should Defense Person Start SIP? In this post we will talk about which factors to keep in mind while investing money.

First of all we will talk about what is Defense Person Investment and why. Most of the defense persons invest their savings in real estate. The reason for this is that they get property in return and the risk is also less. If the property price does not increase even then it can be used. But if you compare it with the loan taken for the property, then you will feel that it does not have as much benefit as you think.

You must have heard about inflation rate. While investing, one should always keep in mind that the returns should be higher than the inflation rate. For example, if the inflation rate is 5% and your return on investment is 8%. In this situation your money is giving returns of only 3%.

Now let's talk about what things should be kept in mind while investing money.

Things to keep in mind while investing money

1. Reliability.
2. Returns %.
3. Funds availability.
4. Tax on returns

Reliability

Whenever you invest money, first of all you must know the legality of that source. Many companies attract customers to invest money by showing good returns. He will also show you the address proof or company registration of the company. For your information, let us tell you that any person can easily register a company. Therefore, before investing your money, make sure that you are investing your money in a safe place.

If someone is making you double tax returns in one year or two years, then it is clear that he is cheating you. Beware of such persons. If you want to invest in companies only, then the safest way is Mutual Funds, SIP or Equity Market. However, investing money in the equity market without knowledge is also a big risk. So invest in Mutual Funds or SIP (Systematic Investment Plan) only.

Government approved ways for investment in which you can invest without any hesitation are AFPP Fund, Mutual Fund, SIP, ULIP, Equity Market, Real Estate, Post Office Saving Scheme, Insurance Scheme, National Pension Scheme, Fixed Deposit ( FD), RD (Recurring Deposit) etc. All these methods are safe and there is little chance of fraud in them. Although the returns are different in all these methods, some have fixed returns and some have different returns. This means to say that you should invest your hard earned money in safe ways only.

Return %

Another important factor while investing money is the returns %. That is, where you are investing money, how much returns are you getting. If you are getting returns less than 6% then you should think twice before investing. Because in general the inflation rate remains between 3% - 6%. And you are also getting 6% or less returns on investment. This means that the value of your money is not increasing.

For example, if you invested your money in such a place where you got 6% annual returns and inflation rate was also 6% that year. So after one year your money will increase from Rs 1 lakh to Rs 1 lakh 6 thousand. But their value will remain the same. That is, you will be able to buy only those items from them which you could buy a year ago for 1 lakh rupees. Before investing money, also make sure that the returns are fixed or not.

Because returns % are fixed in some places and flexible in some places. For example, returns are fixed in FD, RD, AFPP etc. Whereas in SIP, ULIP, mutual funds, etc., the returns depend on the stock market, which keeps on increasing more or less.

Availability of funds

While investing money, it is important to pay attention to how long you are investing. There are many investment schemes in which your money is locked for a limited period of time. That is, during that time you cannot withdraw your money. Even if you withdraw money at that time, you will also suffer a lot of loss. For example, there is a lock period in FD, RD, insurance scheme etc.

The returns in such a scheme are also fixed. If you do not need money for a long time and you want to invest your money without taking any risk, then you can go for such a scheme. In which there is a lock period and the returns are also fixed.

If you have money available to invest only for a short period of time, then invest it in a place where there is no lock period.  In other words, such investment instruments where money can be withdrawn in one to two days. In such a situation, you can invest in Debt Mutual Funds. Where the returns are generally higher than FD, and RD and you can withdraw money whenever you want.

Tax on returns

Before investing money, we calculate returns on investment. At that time most people do not take into account the tax. Taxes are also levied on the returns received in many investment schemes. Due to which those returns % are reduced. For example, Mutual Funds, Debt Mutual Funds, Equity Markets, SIPs all have different tax % in different situations.