You invest to earn a return. Hence, you need to know the key factors that can impact your investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More return.

The first thing you have to watch out for is the QUALITY of the asset you invest in.
A good quality investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More may falter but usually, over time, returns will meet your expectation. With poor quality investments, there is the danger of losses and losing your capital too. To ensure quality, do some thorough research about the investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More option. If you are unable to, then outsource the selection to a trusted expert. Quality matters regardless of the time period for which you are investing.

Next, keep in mind INFLATIONInflation is a common term thrown around in economics lessons and by politicians around election time. What it means in simple language is that prices of things you buy, stuff, keeps increasing every year. It happens because the economy in... More. InflationInflation is a common term thrown around in economics lessons and by politicians around election time. What it means in simple language is that prices of things you buy, stuff, keeps increasing every year. It happens because the economy in... More refers to the yearly price rise in the economy, which ultimately lowers the purchasing power or value of your Rupee. Rs 100 today will be worth just Rs 94.3 after one year if the yearly inflationInflation is a common term thrown around in economics lessons and by politicians around election time. What it means in simple language is that prices of things you buy, stuff, keeps increasing every year. It happens because the economy in... More is 6%. Any return you earn on an investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More is automatically marked down because of this inflationInflation is a common term thrown around in economics lessons and by politicians around election time. What it means in simple language is that prices of things you buy, stuff, keeps increasing every year. It happens because the economy in... More. If you are investing for a long period of a few years, look for good quality, inflation-beating returns.

Lastly, be mindful of TAX. Interest and dividend income or returns are taxed at your income tax rate. Any increase in the capital value of the asset is taxed using the capital gains tax rules. Usually, short term capital gains tax is higher than the long term capital gains tax. Bonds, equities, real estate and gold assets have different capital gains tax rules which you should be aware of.

For your long term investments, ideally, you should look for efficient post-tax, post inflationInflation is a common term thrown around in economics lessons and by politicians around election time. What it means in simple language is that prices of things you buy, stuff, keeps increasing every year. It happens because the economy in... More returns from a good quality asset.

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