Anyone would agree that Indians have a thrifty nature and are very good at saving for a rainy day. Maybe it has something to do with our culture, wherein parents have to cough up a substantial amount of money for their children’s weddings, and that’s aside from the cost of giving them a quality education; then they have their own home to procure plus of course their retirement fund. All in all, that’s a lot of money needed!
The habit of saving money becomes ingrained in us at an early stage in life. Maybe it’s a good thing because come what may with the world economy, the Indian economy remains fairly stable and times of recession do not hit us as hard as with other countries.
As we grow older and start earning, we are taught to contribute 10% or more towards a nest egg. The smarter ones go ahead and invest their savings in some form that makes it multiply faster. Some of the major sources of investments available include real estate, jewellery and of course, the stock market. It’s always more comforting to have some physical evidence of our money, so jewellery and real estate are what the choice finally boils down to. The stock market is a little shaky and not really worthy of risking your hard-earned money.
Over the last 50 years or so, there has been a 10% or more exponential growth in the real estate sector; this translates to its being a good source of investment. You can buy an apartment, rent it out, and sell it off after a few years and you would still make good profit margins. Of course the trick would be buying in the right location such as the suburbs of big cities; as cities are expanding vertically as well as horizontally, today’s suburbs will become more central to the city tomorrow, and gain property value accordingly.
The population of cities is growing at a great rate meaning a greater need for homes tomorrow, so those who have money to spare would be making a wise choice by investing in real estate.
Jewellery on the other hand is also a great choice of investment as the price of the precious yellow metal has also been on the rise. In ancient times, India was known as ‘sone ki chidiya’, which translates into ‘bird of gold’; this gives an idea of how much importance Indians attach to gold. Its coveted by those who can’t afford it and worn lavishly by those who can. In weddings, especially in Kerala, lakhs of rupees are spent on gold alone as the brides are decked out in jewellery.
Parents start investing in gold right from the time their first child is born and it sits in the bank locker; this makes it a dead investment as it’s not multiplying in value and neither are there any tax benefits to it. Increases in gold price also mean devaluation of paper money, so it brings a nominal gain only. On the other hand investing in real estate makes your money grow, plus there are tax benefits, hence a better choice might be to put your money where there are larger profit margins. So dream big and invest in real estate!