which is the best place to invest money after demonetization program in india


To understand more about how to make routine investments in India, you may like to read the text below:

Most of the young people in India today, spend their entire earnings on trying to show off their wealth by splurging on the latest mobile phones, latest watches, latest bikes, latest cars, latest gadgets, expensive restaurants………. to impress their boy/girl friends & the society in general.

Almost everything is purchased on loan with monthly EMls with Very High Hidden-Interest-Rates. So, they live beyond their means and thus save almost nothing.

So, the best way to save money is to lead a reasonably simple life like the Billionaire Mr Warren Buffet and our own Billionaires, Infosys founders, like Mr Murthy & Mr Nilekani.

How to invest

1. Invest in PF, ELSS to save taxes.

(Also consider TERM INSURANCE for Your Own Life-Insurance to PROTECT your family. Insured amount should be 5-10 times your Yearly CTC.

Also consider Rs. 3-5L Family Floater Medical Insurance to PROTECT your family.

Apollo Munich-Canara Bank Mediclaim is one of the best policies available today. Go to any Canara Bank branch to get the same.)

2. The best investment is to buy your first house by taking housing a loan from an organization like HDFC.

3. Before or after buying your own house, you should invest whatever extra money you have

a. In AAA-rated Bank or Company FDs or NCDs (if you want the money in less that 5 years) and

b. In Equity Oriented 5-star-rated Mutual Funds (if you can keep the money invested for minimum 5–6 years). This investment in MFs should be done taking the Monthly SIP route as explained below.

Most of the people think,

(Monthly Earnings minus Monthly Expenses) = (Monthly Savings)

In reality (as per the Billionaire Warren Buffet), it should be,

(Monthly Earnings minus Monthly Savings) = (MonthlyExpenses)

So, you should FIRST put your money in savings (=investment) on a monthly basis and THEN start spending for the month from the balance money available to you after your monthly systematic savings/investments.

The best MFs to start Monthly SIP are given below:

Invest in 5-star-rated Balanced & MultiCap Mutual Funds (MFs).

 Your investments should be through Monthly SIP (Systematic Investment Plan).

 You should not think of withdrawing the money for minimum 5-6 years. (You should also not withdraw in panic even if the market crashes, if you have invested taking the Monthly SIP route in 5-star-rated MFs.)

You will double your money in about 5 years and 4 times in 10 years.

invest Rs. X,000 per month (SIP) in each or some of these MFs:

For Tax Saving: (3-yr Lock-In period)

1. Axis Long Term Equity Fund | Invest Online (This is ELSS for tax saving & is also a very good investment.)

Invest 50% in Hybrid / Balanced Equity Oriented MFs (Low Risk, with doubling of investment in about FIVE years)

1. SBI Magnum Balanced Fund | Invest Online

2. Tata Balanced Fund – Regular Plan

3. ICICI Prudential Balanced Fund

>> Invest 50% in MultiCap MFs.

1. ICICI Prudential Value Discovery Fund

2. Franklin India High Growth Companies Fund

3. Birla Sun Life Equity Fund

4. SBI Magnum Multicap Fund

All are good for Long-Term (=more than 5 years) investment.

There are many things that you should know about MFs. Some of them are stated below:

(The %s & other statements below are India specific.)

1. Don’t expect quick returns from MFs in just a couple of years. You should be willing to wait for minimum 5 years to get about 100% returns from 5-star-rated MFs.

Sometimes, you may have to wait for 6-7 years if there is a major market crash.

2. Invest taking the monthly SIP route. (Lump sum investments are NOT recommended especially when PE ratio of SENSEX/Nifty index is above 18.)

3. Invest only in 5-star-rated MFs taking the monthly SIP route. (Refer to valueresearchonline and moneycontrol sites for MF ratings)

4. IF you have invested in 5-STAR-RATED MFs taking the MONTHLY SIP route, THEN don’t sell in a panic even if there is a major crash in the market. Don’t worry, the value of your investment will grow again to a good level in a few quarters.

5. Don’t expect uniform yearly returns from your investment. During some years, it could be even negative.

6. Indicative Returns will be approximately in the following range for different MFs:


4 times the investment in about 10 years (With Low volatility)

(i.e. Investment of Rs. 100 >>> Final value of investment Rs. 400)

MultiCap :

4 times the investment in about 8 years (With Medium to High volatility)


4 times the investment in about 6 years (With VERY HIGH volatility)

I am giving below some basic inputs on how to make safe investments in Mutual Funds on a monthly basis and how to double your money every 4–5 years.

What are Mutual Funds (=MFs)?

When we invest directly in the stock market, we purchase shares of AsianPaints, Infosys, ITC, Nestle, TCS…. But, as we are not experts, many times we buy & sell shares (=stocks) at wrong prices which lead to unexpected losses.

So, instead of shares, wise people purchase MFs. Each MF is managed by a Fund Manager who is an expert in buying & selling of shares. So, when you buy a mutual fund worth Rs. 10,000/-, the Fund Manager buys many shares worth total Rs. 10,000/- making sure that he is buying them at the right price. So,when you buy an MF, you don’t have to worry about buying individual shares. The Fund Manager does it for you.

MFs typically give about 15% TAX-FREE returns per year in the long run. In other words, if you invest in Mutual Funds for 4–5 years, then your invested money will double in 4–5 years. (In Bank/Company Fixed Deposits, Recurring Deposits etc. your money will double only in about 8-10 years as you can get maximum 7-10% returns.)

You can double your investment in approximately 4-5 years if you invest, taking the monthly SIP (Systematic Investment Plan) route, in 5-star-ratedBalanced and/or MultiCap Mutual Funds, and that too TAX-FREE. (Please note that the highlighted words are very important.)

Invest equal amounts of money in 2-3 of the following Mutual Funds , in the first 5 days of every month. In other words, start a weekly/monthly SIP (Systematic Investment Plan) by going through ICICI/ HDFC/ SBI or any other dependable bank or broker.

Mutual Funds (MFs) are very good for safe investments if you don’t touch the investment for 5–6 years. (This investment is to be done for a long-term, exactly the same way as you do when you purchase a piece of land or a house or a flat or gold. Such items are not to be sold in just 1-2 months/quarters/years but only after 5/10/15/20/25/30/…… years.)

Investments in MFs are safe though the value of investment fluctuates as per the stock market movements.

You should ideally do monthly investments in 2–3 MFs, of 2-3 different Mutual Fund Houses, taking the Monthly SIP (Systematic Investment Plan) route.

Investment Categories/asset classes & Yearly Returns:

FDs/RDs:6-7% per year

Gold: 9–10% per year

Real-Estate: 10–12% per year (Limitation: Can’t invest just a few thousands per month in real estate. You have to invest in lakhs only. If you urgently need money, you can’t easily get a buyer. From the time you think of selling, till you get the money in hand, it could take a few months. Also, you can’t sell just one room out of a 2 bed-room flat, if you require only a few lakhs for an emergency.)

Mutual Funds: (You can invest as low as Rs. 1000 per month in a mutual fund. You can also sell only a very small part of your investment in a 5-star MF if you need only a small amount for an emergency.)

 5-star rated Hybrid/Balanced MFs (Returns ~ 15% per year tax-free in a block of 5–6 years. Typically, your invested amount will double every 5 years.) Prices of Hybrid/Balanced MFs fluctuate less than the prices of MultiCap MFs.

5-star rated MultiCap MFs for medium risk (Returns ~ 18% per year tax-freein a block of 5–6 years. Typically, your invested amount will double every 4 years.) Prices of MultiCap MFs fluctuate more than the prices of Hybrid/Balanced MFs.

These fluctuations of prices can make you worry about your investments in MFs. However, if you have invested in 4 or 5 star MFs (taking the Monthly SIP route) and if you are a long-term investor, then you should not worry about your investments in MFs at all.

After you make investments in 5 or 4 star Mutual Funds of Hybrid/Balanced and/or MultiCap category, don’t sell them for 5–6 years even if the stock market fluctuates substantially. They will go down in value & again go up in a few quarters. Don’t worry.

There are other MF categories which can give higher returns but are very risky. So, I am not recommending those categories.

Invest equal amounts of money in 2-3 of the following Mutual Funds , in the first 5 days of every month.

In other words, start a weekly/monthly SIP (Systematic Investment Plan) by going through ICICI/ HDFC/ SBI or any other dependable bank or broker. Investing in these Hybrid/ Balanced Mutual Funds is a safe investment.

4 & 5 Star MFs are managed by experienced Fund Managers. So, these are safe investments.

Always invest in 5-star (or minimum 4-star) rated mutual funds of reputed fund houses of ICICI, HDFC, Tata, Franklin Templeton, Birla Sunlife, DSP BR, BNP Paribas, SBI…

Never invest in 1/2/3-star Mutual Funds even of these reputed fund houses.

After you understand more about investments in Balanced MFs, you may also invest in multi-cap mutual funds after a few quarters.

Please note that directly investing in the stock market (=shares) is very risky and you may lose your money as it is a Very High Risk investment avenue. So, don’t invest in stocks /shares directly. Invest in MFs.

Investing = (Buying and not having any intention of selling for minimum 1 year or preferably for minimum 5–10 years) = (Like our investments in real estate or gold where we don’t think of selling it for a very long time)

Trading = Buying a stock (=share) and having plans of selling it, in less than a week/ month/ quarter/ year for making quick profits. Traders are sometimes lucky in some initial trades (=beginner’s luck). However, in the long run, they don’t make money or make losses.

Depreciating Asset: Value of a Car worth Rs. 7 lakhs becomes ‘zero’ in 10 years. (Shallow and unwise people normally splurge on Fast Depreciating Assets like the latest & expensive cars, bikes, mobile phones, watches…)

>> Appreciating Asset: Value of an investment in a flat/house/Mutual Fund worth Rs. 7 lakhs becomes approx. ‘Rs. 25-28 lakhs’ in 10 years. (Rich & Wise people prefer to invest in such Appreciating Assets.)

When you invest monthly in Balanced MFs, taking the SIP (Systematic Investment Plan) route, then

Your investment will double in ~5 years at 15% per year appreciation (tax-free).

So, in 10 years, value of your investment will become 4 times the invested amount.

In 15/20/25/30/35 years, it will become 8/16/32/64/128 times. Your money would just keep on growing.

Please note that this growth will not be uniformly achieved every year, but will be achieved in a block of 5–6 years.

Your investment will grow as if money is growing for you on a money plant.

This investment journey & opportunity will give you much better returns than your investments in gold.

All the best!!

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