Dreaming of something is human nature and no one can stop you from fulfilling your dreams if you are consistent with your work and ambitious towards your future. Constantly following action towards your dream will not only help you fulfil it but also can lead you to a financially stable life. Here we explain options through which you can fulfil your dream of buying a house.
Equity-oriented mutual funds
To achieve your dream house, you must need a huge corpus that requires an adequate rate of returns that can beat inflation and appreciate your principal amount invested. The stock market works in a way with more risk and more returns. However, risk must be taken on a calculated basis.
When investing in equity-oriented mutual funds, you can diversify your risk and get maximum returns as when a company grows, your money grows in the same proportion. Equity mutual funds help you to fulfil the dream of buying a house quickly and easily.
Index funds
Index funds work as a mutual fund or ETFs (exchangeable traded funds) consisting of all the constituents of an index like Nifty or Sensex. When you invest in an index fund, you proportionately buy all the companies listed in a particular index in which you are investing.
For example, if you have invested in Nifty 50, it means you are investing in all 50 companies proportionately. The important aspect of an index fund is that you do not do a lot of research while investing in it as the index has already included the top-performing companies. You can get stable and inflation-beating returns for buying your dream house.
Real Estate
You can invest in real estate to buy other real estates. Quite ironic but a nice idea to get greater returns. It is not necessary to invest in physical properties as it also involves a huge amount of corpus in a lump sum. You can also invest in real estate in the form of REITs or real estate investment trusts, allowing you to invest in properties and get proportionate ownership. Real estate appreciation helps you in achieving the corpus you need to buy your dream house.
PPF and EPF
Public provident funds and employee provident funds are also great investment avenues to get a handsome return on investment while saving your taxes as well. You can claim tax deductions under section 80C for investing in these schemes. You can earn an interest rate of 7.10 percent in the PPF account and 8.10 percent in the EPF account, which is inflation-beating and suitable to buy your dream house as well if you are not looking forward to investing in risky investment avenues.
Gold
Investing in gold is a conventional approach in India, but there are various ways of investing in gold which can get you greater returns. Investing through the stocks of gold mining companies, gold ETFs, gold bonds, and bullion are some of the options. Gold is also a great investment avenue with stable returns to fund your dream house.
Having a goal in your mind while investing is the best way to optimise your returns and stay invested for a longer period of time, which helps you in availing the magic of compounding in any investment scheme.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com
