“The gold and silver import at US$ 61.5 billion has recorded a growth of 44.4 per cent during 2011-12” (that is over 3 lac crore rupees).
“Trade deficit for 2011-12 had hit a record $185 billion” (that is over 9 Lac crore rupees).
Money is a very important thing in life. The more important thing is to maximise, improve and maintain the standard of living. There are many ways to do it and I would share my dad’s experience on how to do it easily & conveniently.
The most important thing is to plan and save your wasteful expenses and maximise your earnings & savings, and to put this saving into regeneration. Regeneration as in seeds or corn, that multiply itself after sowing. Thus protect your money and learn investing.
The first step to investing is to get your own house or flat (to save rental expenses). There are various exemptions in Income Tax and many promotions by government (low rate house financing) that should be maximized. A good way is to buy the property in the name of both the husband & wife, and finance the cost to reduce the income tax liability.
The next is to invest in PPF up-to the maximum exemption limits to exploit the tax benefits and to get a portion of fixed income.
Investing further savings require a little homework. The best options are to invest in equities, real estate or bullion. Our passion is for investing in equities. However, we often get queries for investing in gold & silver, which can be good hedge against inflation if properly channelised in a right way.
While buying and selling gold from retail jewellers, 10-30% amount is charged as making expense. Thus 20-50% of investment is eroded itself on buying and selling. Better way is to invest in government mint gold/silver coins (there is even a separate index for it).
Investing in bullion is also a better way since it also avoids making charges and has a good liquidity. ETFs are also a very good option and cost just 1% annual charges. Buying gold & silver in future markets (the farthest month, at bargain price) is also a good way.
Fortunately, India has the highest individual level investment in gold & silver. Habit of saving exists in India. However, most of this saving is invested in the idle assets. Governments & banks are yet to explore the options to lever-up and circulate gold investments by way of listed gold bonds and schemes.
Personally, we deploy maximum of our funds in equities, for they are the most liquid and most tax-beneficial investments, and at the same time contribute to the national development.