“I made my first investment at age eleven. I was wasting my life until then.” – Warren Buffet

There is no doubt that start investing for your future in your early age is the best option to gain financial freedom as early as possible.

By investing early, you can achieve all your short term and long term financial goals easily.

The main advantage of starting early is compounding of interest. Compounding allows to create more money, so your money will work for you to create more money.

Unfortunately, the reality is that most of our young generation would like to start investing and saving for their future but have no idea where to start or how to start. so here are some best option to start investing..

1. Fixed Deposit / Recurring Deposit –

• FD and RD is considered as safest option for investing in India.

• FDs can be opened in any bank and post office.

• Tenure of FD is minimum 7 days and maximum of 10 years. And the other side RDs can be open for minimum 6 months and maximum of 10 years.

• In FD you have to deposit a lumpsum amont for a fixed time but in RD you can deposit monthly for a fixed time period.

• Interest rates on FD and RD are vary from bank to bank and it depends upon tenure of investment too.

2. Public Provident Fund (PPF) –

• If you want to invest money of a long term goal as children education or build a house then this scheme can be very useful for you.

• It’s tenure is 15 years which can be expanded by 5 years blocks.

• PPF account can also be opened in any bank or post office.

• Ministry of Finance, GOI decides it’s interest rate. Interest rate is reviewed every quater by GOI.

• For more information on PPF Account you can read my article here, PPF

3. National Pension System (NPS) –

• This is also a long term and retirement focused scheme by Indian Government.

• You can open your NPS account in any bank online or offline.

• Minimum annual contribution is ₹1000.

• It invest your money in equity, FD, government bonds etc. And you can choose how much of your money going to which sector.

• It is managed by Pension Fund Regulatory and Development Authority (PFRDA).

4. Direct Equity –

• Many avoid investing in stock market as it is not have any fix returns percentage and it need much home work and patience.

• It is much riskier option than others.

• You can lose you money too but if you educate yourself first, analysis market behaviour and then give it a try then it is the best way of investment.

• It’s returns can beat any other scheme’s return if you choose right shares and right entry and exit time.

• You must have a DEMAT Account for investing in stock market.

• For good returns, you should diversify your portfolio in large cap, mid cap and small cap companies.

5. Mutual Funds –

• Mutual funds is an alternative to direct equity.

• If you don’t have so much time to learn about stock market and it’s behaviour then you can choose to invest in mutual funds.

• Mutual funds are managed by experienced fund manager. and it diversify your investment so it is less risky.

• In mutual funds there are so many types of scheme, like some focused on direct equity mutual funds which give higher returns but has higher risk as well, some called debt mutual funds which is less risky and give lower returns but it is good for regular income.

6. Gold –

• Gold is emotionally connected to Indians. We love having gold, but not as an investment option.

• Gold is a good investment option for long term.

• You can invest in gold by buying physical gold as jwellery or coins, but it is more costly as you have to store with security and have to maintain quality of gold.

• Or you can buy paper gold as buy digital gold, gold ETFs, Gold mutual funds and sovereign gold bonds.

• To know more about SGBs click here, Sovereign Gold Bonds.

7. Real Estate –

• In my opinion, Real Estate is the best investment method. But it needs large amount of Investment and the procedure to acquire or sell any real estate is very hectic.

• Investment in Real Estate give returns in two ways – Rentals and Capital Appreciation.

• The main factor which decides value of any property is the Location of that property. If location of your property is good then you can easily get rental and the capital appreciation will be higher.

• Real Estate is most illiquid form of investment.

So here are some investment methods which any young adult can adopt to increase their wealth and earn some passive income and it will lead you to financial freedom.

But for start investing you should first analysis your financial situation as how much you can save, how much money you should keep as emergency fund, what is your risk profile. As there are some methods which are directly depend on stock market which is more volatile and some government backed schemes which give you fixed returns which are safer options.

If you want to know more about these Investment methods then you can comment here or direct contact me.

Happy Investing.