Now we know that why saving and investment are so important. I have also explained the simple steps for saving money and becoming rich Read Here.  Now the question is where we would invest our hard-earned saved money.

Types of Assets class:

The most popular assets in which we can invest are given below:-

1. Fixed income instruments

2. Real Estate

3. Gold or in any ornamental metals

4. Equity (Stock/share market)

5. Cash


Whichever asset we choose for investing, the main motto is to choose the way which is safe but same time ensure a reasonable rate of return on our investment. We keep in mind the risk and reward of investment at the same time.

Normally high risky investments are offering us very high returns and if the investment is very safe then we get a moderate rate of returns. So we can say risk and reward are like two sides of the same coin.

1. Fixed income instruments:

Fixed income instruments are traditional, they have limited risk (can say very low risk) and very limited returns. The returns are in the form of interest paid on the investment.


  • Bank fixed deposit (FD)
  • Bonds issued by the government of India
  • Bonds issued by the government agencies like NHAI, Indian railways, NTPC etc.

A bond issued by private companies like Mahindra Finance, LIC, Muthoot finance, banks, etc.

As of now when I’m writing this article the FD rates varies from 4.5 % to 5.5 % annually which are very low in nature and hardly beat the inflation rate (4.3 %).

Government Bonds rates (yield) are normally around 6.5 % for 10-year bonds which are good over fixed deposits but we have to hold our money for long periods. If you want to go very safe with your investment and at the same time be happy with a moderate return, you can choose this option.

2. Real Estate:

Real estate investment means you have to Buy any property/land (commercial or non-commercial) and sell it at a higher price than you bought it. This is as simple as that.

The 2nd method is to buy the rental property and earn rental income from this property.

But this investment procedure can be quite complex for some people because of some reasons.

  • Involves many legal documentation
  • Require very large capital
  • Return is not for sure
  • Very large time period for holding

So that it is good for the people who want rental income or maybe have some extra cash. In the long run, the property gives very good returns.

3. Investment in Gold:

Indians are very keen to invest in gold from ancient times. Investing in gold is the prime and safest option for us in India. From making and wearing gold ornamentals to gold coins are some simple methods of investing. This is safest investment option ever across all over the world.

It can be seen from the past records that gold prices are increasing in long term. Normally it can give us a 7-8 % safe rate of return. You can also invest in other metals also like silver, platinum.  Now a days government issued gold bonds are very famous. You can go for it because it is as same as buying of gold.

4. Equity Market (Stock/share market):

Investment in equity involves buying shares of publicly listed companies. You can buy shares on exchanges such as Bombay stock exchange (BSE) or National stock exchange (NSE) through many brokers like Zerodha, Groww, Motilal oswal, Paytm money etc.

Unlike other instruments there is much more risk and no surety of our capital itself. However the returns from equity are very attractive. It has generated around 14 % to 15 % CAGR (compounded annual growth rate) over 20 years.

But identify these good opportunity stocks require skill, hard work and great patience. It is very hectic task of any new person. you should learn this market first before investing your money in it.

If you want to invest in stock market you can go for expert SEBI register advisor. Also you can learn investing skills from us that can give you better understanding of stock market in depth and then you can invest yourself after research.

5. Cash:

You can also keep separate your earnings in the form of cash. It can be used as an emergency fund. Also it provide us maximum liquidity of funds and available any time in real need. We don’t have to sell stocks, go to bank to break fixed deposit in emergency. We should keep at least 5% of our funds in cash form.


Investing is an art. Anybody can learn this skill and become artist and grow his wealth. You can choose any investing instrument that can suits your risk appetite and suits your rate of return requirements. 

Asset allocation:

Asset allocation:

it’s all starts from a saying that-

don’t put your all eggs in same basket. That means don’t invest your all money in the same instrument/asset.

So we have to diverse our portfolio and invest in all instruments in different proportions.


Why asset allocation is necessary/important?

Actually each asset or instruments has their own merits and demerits. Sometime our invested stock may not perform well and can wipe out our all money. If we have heavily invested in a real state property and in emergency we cannot able to sell in some days then what can we do. So it is very important to allocate our funds in different assets for the safety and easy availability of funds.

Asset allocation is mainly depends upon the needs and the long/short term financial goals of the investor. But it is suggested below that you should invest in this proportion so your funds would safe and also liquid (easily available).

Hope you enjoyed the learning of this article. If you have any question and doubt in your mind, you can ask me in comments section.

My name is Mohit Luniwal and Thank you so much for reading.

you guys are so amazing.

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