The Investment Options

Investment options are changing over the time. Earlier investments by the middle class people used to be in bank or post office deposits, life insurance or gold or house.

But there has always been a risk-return trade-off in a given investment. Higher the risk, higher the return.

1. Deposits


Bank deposits are examples of lower the risk, the more modest the return. While older people prefer to remain safe, younger generation has more risk appetite and seek avenues in stock market, mutual funds etc.

2. Real Estate


The most important investment used to be in real estate. It was an investment with sentiment of “my home.”

Seniors have taken up homes not only for themselves but also for their children, but children are not interested in those houses, as they have built their own houses with own income at their places of choice.

The attitude of young people towards real estate is different. The next generation seems to be more pragmatic and is not as emotionally involved as the senior citizens. They take real estate as an investment and their options may extend to Dubai, London or New Zealand.

The rate of job-hopping with relocation is higher among the younger generation. It is more affordable and feasible for them to rent in a city than to buy. 

Today the land prices are not rising as they used to and return on real estate is not at all lucrative. New launches have also gone down after covid, as there is an increase in unsold housing inventory in many cities.

3. Gold


Another traditional investment used to be in gold-coins and jewellery. The price of gold has grown, but in the long run, the return on gold investment is only around five to seven per cent.

Investing in gold and silver is often very emotional, though not practical, as it is risky to handle and is mostly kept in a bank locker enriching the bank with the annual locker rent.

The new generation prefers to wear artificial jewellery rather than real ones, as they do not want to take risks. As an investment, they prefer to invest in gold scrips and bonds like any other stock online instead of real gold. Crypto-currencies have become a new craze among youngsters.

Planning

It is said that Indians live in poverty all their lives, just to make the next generation rich. They die rich. They forget their own pleasure for the sake of a better future.

This mindset is however gradually changing and people have started living lives for themselves.

Average lifespan is increasing. Cost of living is also rising. Saving is therefore, important. Money is essential if one doesn’t like to be dependent. And for that, an appropriate financial planning is a must. The planning would be perfect, if one knew how long he or she was going to live. But, perfection is esoteric.

–Kaushal Kishore

22 Comments

    1. May be, but in India, the priorities of younger people have changed dramatically. Fulfilling the needs by taking loans is common. Thank you for liking and sharing your valuable feedback 😊🙏💐

      Liked by 1 person

  1. This is really interesting and thoughtful. Enjoyed it and appreciate it.

    Here in our part of Canada real estate is still climbing and climbing. The rental market thus climbing also and where there was not an obvious class divide before (except one that was little recognized or talked about – the divide between the indigenous and the settlers), one is forming (even amongst the settlers), I believe. The shops who can afford the rent cater to the rich and the retired who have saved their money. The prices become difficult for the below-average wage to support. This means there is a shortage of frontline workers in the area as well, and social problems which exacerbate it and/or combine with it.

    I agree with your analysis of the generations and in some way that part of it all feels like positive forward movement. Ultimately the ‘kids’ find a way to survive, and want little to do with the past as they navigate their way through the sufferings and joys of the present. The parents are wise to attempt to support and follow, as much as seems prudently reasonable.

    Liked by 1 person

    1. Thank you for such a detailed comment, Lia. In Canada, the situation may be different, but we see that price of real estate goes up when stock market comes down. Stock has more than doubled during the last 18 months from 27 K to 60 K. The real estate therefore doesn’t pick up, but builders are not reducing price that results in high inventory of ready to move homes. As regards generational gap, I still find old people sentimentally attached with their own ancestral houses. I know many of them don’t want to go with their sons due to this. Thank you so much, Lia for taking your time to read and share your thoughts in detail. I really appreciate it.

      Liked by 1 person

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