Nov 04, 2017 10:45 AM IST | Source:

Your Money This Week: Wealth creation strategies; what NRIs should do with their PPF corpus

Find out the strategies you need to adopt to create the large corpus for yourself.

Moneycontrol News @moneycontrolcom

Investing is a long journey since wealth is created when your money is invested in the right instruments over a long period of time. There is no short cut to wealth creation.

Investing is also about being disciplined and systematic. And you really don’t need huge amount of money to start the process of investing.

As Anil Rego, Founder, and CEO, Right Horizons, points out: “Anybody with a few rupees to spare can invest today in India. Gold can be bought digitally for as little as Re 1. Mutual funds allow monthly investments of as low of Rs 100. One can also invest indirectly buying shares of small companies for Rs 5-10 apiece.”

In our article we bring you tips from some of the leading personal finance advisors on the strategies you need to adopt to create the large corpus for yourself.

In the current bull-run in the equity market, many who have remained invested in quality stocks would have made substantial gains. However, even while the markets are running up to new highs, one should not lose sight of the other asset classes such as debt and real estate. Read our guest column to know how the various assets classes have performed over the past several years and where should you be investing to have a balanced portfolio that would give you good, steady returns.

While the stock market rises to new highs, mutual fund investing is emerging as one of the most favoured ways to create wealth, especially for beginners who want to have exposure to financial markets. Mutual funds are a collection of stocks and bonds managed by investment professionals. If you are planning to start investing in mutual funds be prepared to take these important broad steps – having necessary documents in hand, knowing the purpose of investment and selecting the right mutual fund schemes.

However, beginners in mutual fund investing need to know few more things to help them take a right decision. In our story we list out the things you should know about mutual funds before you make your first investments.

If you are planning for retirement savings, the most common instruments that come to mind are the Public Provident Fund (PPF), National Pension System (NPS) or the mandatory Employees’ Provident Fund (EPF). However, there are other schemes such as the Post Office monthly income scheme (PO-MIS) which can be one of the better instrument to invest for your retirement. However, this is for those who require regular income can park their money in such scheme.

Read Why you should consider Post Office Monthly Income Scheme for retirement to know the features of POMIS and why it makes sense to investment a part of your portfolio in it.

However, if you are an NRI or are about to become one who has been putting money in PPF or National Savings Certificate (NSC) for retirement savings, you would have got a rude shock as the government has said if your residency status changes to NRI, your Public Provident Fund (PPF) and National Savings Certificate (NSC) accounts will now deemed to be closed. Your PPF accumulation in such case will earn you a meager 4 percent, while the NSC will earn you the rate given in post office savings account. Both PPF and NSC give interest income of 7.8 percent interest at present.

Read views of some personal finance experts  who tell you what to do with your accumulation in case you are one of those who are faced with this issue.
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