If you feel you are in middle class and need some idea about investments options for you , then continue reading this post.

Are you planning to come out from middle class life  and need to improvise your wealth, then you are in the correct place and this article is for you.

You are either in the category of rich, middle class or poor. You category is not decided based on lifestyle it is based on mindset. Most of the time you heard the poor person elevated his life to rich category.

But middle class will born in the same category and die in the same. This is due to mindset and life style what you are following.

We are having lot options if it comes to investment in India. Starting from PPF to recent trend crypto markets. Every investments makes you rich if you do it properly , at the same time if you don’t do it properly it will broke your financial life drastically.

It is up to you how you are going to handle the investments properly in life.

If you want to  understand What is investment? click here

Financial mistakes of the middle class

Not saving before spending

After salary comes, if you thing will save money which is remaining after spending , then you will be in middle class in your whole life. Because in todays world you can easily buy the things which you cannot afford using credit cards and EMI’s, will end up paying more bills during starting of the month and finally you cannot save single penny also for you.

“Penny saved is penny earned “

Not understanding liability and asset

Rich people try to accumulate asset instead of liability, if you are accumulating more liability instead of asset then you cannot able to come out from middle class even though you are investing in high return instrument.

Liability Examples.

Home or any other things in EMI is liability. If some thing is taking money from your pocket in liability.

Asset Examples

Rented home with out EMI, stocks ,bonds and any other saving which will give returns is consider as assets, these things will bring income to your pocket.

Failed to understand compounding 

Not giving enough time for investments to multiply itself.  Even PPF give more returns than stock market. See the below example How it is possible.?

Person X invested 50k per year from his 20th age with ROI of 7.1% in PPF for 15 years.

Person Y invested 50k per year from his 25th age with ROI of 15% in reputed stocks for 10 years.

Total net worth of X after 15 years is ₹13,56,070

Total net worth of Y after 15 years is ₹11,61,165

Here clearly time makes sense more than returns. If Y started investment in his 20th age in stocks, than his net worth becomes ₹28,20,489 in 15 years instead of ₹11,61,165.

Click here for returns calculators .

Spending money to impress others or yourself

Life style inflation is big mistake what you will do if you are in middle class. To impress others you will buy or plan to buy car , home and what not ?. Most of wealthy people won’t be visible in public in terms of their expensive things and they won’t try impress others.

If you start living for others , then that is going to be a never ending process. If you want to impress others in terms of life style it is waste of time and money, today your mobile phone is costlier but tomorrow some other phone will come to market , if others will use that then you will feel outdated.

Be classic in things for example if yo are having casual or formal white and black shirt in your wardrobe , this is going to be classical it won’t be outdated with other colors or models in future.

If you are using mobile try to understand that is having some purpose to serve and it is not for showing your status to other people.

Not talking about money

Always feeling money is taboo subject and  won’t discuss with anyone about it also mindset of middle class person.

If you want to buy a car or any other things , surely you will discuss with friends, colleagues  and between your circles but we won’t discuss about investment with anyone.

There is a concept of subconscious mind , if you think  in your subconscious mind that you want  something in your life , surely you will get it in one or the other way. But you are ignoring the concept of investment from your mind and the same way if you won’t discuss it with any one the meaning here is you are not welcoming wealth in your life.

Thinking stock market is not for you

Stock market is most proven way for best investment in the world. But you will thing that it is not for you because it will destroy your money.

Believe me if you keep your money  in wrong bank that is also wrong investment , if you keep your saved money in home as hard cash that is also wrong because it can be easily stolen and the value of money will decrease due to inflation.

Same way if you are not doing stock investment properly , then we need to learn to do it properly instead blaming stock market is gambling.

If you want to became butterfly ask butterflies and don’t ask caterpillars .

If you want to became successful investor ask and learn from successful investors, instead asking from your friend who last money in the stock market due to day trading and other options.

Most of the time you will loose your money in stock because if you will believe stock market either a Ponzi scheme or get quick rich scheme.

So understand the stock market basics in the following sections.

Best investment plans in India

India is having plenty of opportunity to do investment that is the reason lot of foreign investors are keen to invest their money on Indian economy.

Middle class Indians mostly concentrate on the investments like PPF ,NPS, SSY , Bank or post office term deposits etc.. and few of them know about mutual funds. Out of this  FD and RD won’t given returns against inflation.

Government schemes will give returns around 7- 10% which will be more than inflation.

You as a middle class person mostly do these investments for the sake of tax saving or parking your money some where to bring saving habits. During these options you forget about more returns and your concentrate is mostly on the saving part that is good but if you concentrate on more returns nothing wrong in it.

If you heard about mutual funds , but not started one yet , it is time to start. If you don’t know about mutual funds start exploring it, learn it by investing some time on it. It is free of cost , you can get all info in internet.

In investment time is more important than money.

The next thing you need to explore is none other than stock market or share market. If you want to get more returns for your investment stock investment is going be in top on the list.

Even the dividend yield of some stocks are going to best passive income in long run. Click Here to know How Dividends do pay dividends?.

How to start investing in stock market

Understand the basics of stock market first.

It is not an get quick rich scheme

It is not an Ponzi scheme

If you hold the stock of any company , you are going to be partner of the company hence it is called shares.

When it comes to running the companies, there are multiple things you need to concentrate. Explore few things about it so that you can participate in share holding activity.

To earn income as a employee one need to study at least 14 years of continues education. Same way if you want to get more returns on the share investment you need to study little bit about share market.

It won’t give fixed returns due to its volatility but in long run it will give returns more than 15 % for sure.

It is not an alternative for other investments , it should be part of your investments so that you can easily come out from middle class.

Investing in stocks are very easy in this era of internet. You can do this if you are having PAN and you are above 18 by yourself by registering in website or app with in 10 minutes of time. It was not like this during 90’s, it was having lot of paper works at that time.

Example:

PPF, Bonds and other debt instruments will give less than 10% as returns at any cost. Whereas stocks and equity mutual funds will always give more than 15% as returns in long run subjected to correct selection of stocks and funds.

Investing for beginners

I am not telling that you should not invest in other instruments except shares and mutual funds.

You should invest in other debt instruments but shares and mutual funds will give more returns so you need get exposure on it by exploring it.

Explore about shares, equity mutual funds , debt mutual funds along with classical instruments like PPF , SSY etc.. by matching plans with different investments can help you keep you wealthy in long run.

If you depend only on classical debt investments , you will be in middle class only. I want you to come out from it by doing proper investment.

In any investment compounding does magic , main thing in this is start early. Which ever investment you know be it debt or equity or FD and RD start with that and add mutual fund , shares later in your portfolio after exploring about it.

Successful investor and one of the worlds wealthy person Warren buffet started his investment on his 11th age.

As a beginner start with any investment but add the best investments in the journey. With out any investments you cannot able to achieve financial freedom in your life.

Investment is more important than earning more. Start today start early.