- land investment pros and cons
- Comparison with other Investment Options
- The best place to invest in Hyderabad
- buying land vs Home Vs Flat
- home loan vs rent
- home loan vs sip vs personal loan vs mortgage loan vs loan against property
- Tax benefits on all investment options
- ROI on FD, SIP Mutual funds Land etc.
NOTE: buying a 1st / Primary House Not an Investment its Necessary (Just like clothes & food) than Returns.
Need vs Security vs Trade
- Need -> Home.
- Security -> Non Liquid Assests -> Land /Plots.
- Trade -> Buying & Selling (Investing on these Activities) -> Stocks > (Buying Stocks from a group of people’s Money called as Mutual Funds). Risk volatile. Extra Charges.
Where to invest Option is based on your Income Profile & Age.
NOTE: Keep Following This, Updates Regularly.
- Current Inflation Rate (increase in the prices of goods and services) India: 4% {yesterday price 40 and today 44 then the inflation rate will be 10%) -> this is why need a home loan at 8%.
- Bank Saving Account Interest rate: 4%
- FD Interest rates 5 Years Locked 7% Average as on September 2018.
Land Growth Every year 10-12% without any real estate Boom.
Mutual funds Return SIP Based 9-18% based on Risk.
Both Returns are based on Compound interest.
- the expense ratio of 2.9%
- The size of the mutual fund corpus
- Mutual fund Scheme Age
- Historical Performance NAV
SIP Vs LumpSum
SIP (RupeeCost Averaging)
markets have always been volatile. Systematic Transfer Plan (STP) from the debt fund to an equity fund
- Charges: Admin charges. 2-3%.
- Taxes: 15-20%.
- Commission: Securities Transaction Tax (STT). An STT of 0.001%.
- debt funds are subject to capital gains tax. Short-term gains are added to your taxable income while long-term gains are taxed at 20% after indexation.
| Funds | Short-term | Long-term |
| Equity & Balanced funds | Less than 12 months | 12 months & more |
| Debt funds | Less than 36 months | 36 months & more |
| Funds | Tax short-term (1) | 1-3 years | tax long-term (3) |
| Equity & Balanced funds | 15% | 10% | 10% tax for above 1 lakh |
| Debt funds | added to taxable income | add to taxable income | 20% regardless indexation |
SIP: Big LooPHole Only Taxed Every Month investment.
long-term capital gains (LTCG) up to Rs 1 lakh are tax-free in your hands. LTCG in excess of Rs 1 lakh is taxed at the rate of 10% without the benefit of indexation.
deemed before 12 months, are taxed at the rate of 15%
FD Vs RD Difference
Just Like Buying Mutual funds/ Stock LumSum vs SIP Monthly based.
On FD we deposit fixed at a time But RD we need to Every month people doesn’t aware of SIP and low-risk profiles can do this.
No tax Benefits for RD (Up to 10,000) just Like saving Account. But FD you can claim up to 1.5 Lakh under section 80C.
| Difference | FD | RD |
| Invested Amount (Rs) | 24000 | 2000 p.m. |
| Interest Rate (p.a.) | 9% compounded quarterly /Not Monthly | 9% compounded quarterly /Not Monthly |
| Total Interest earned in a year (Rs) | 2234 | 1195 |
| Total Amount after One Year (Rs) | 26324 | 25195 |
| The difference (Rs) | +1039 | -1039 |
Fd vs debt fund
| Particulars | Debt Funds | Fixed Deposits |
|---|---|---|
| Invested Sum | 2,00,000 | 2,00,000 |
| Return Rate | 7% | 7% |
| Lock-in period Years | 3 years | 3 years |
| Fund worth at the end of tenure | 2,45,000 | 2,45,000 |
| Inflation | 6% | 6% |
| Indexed Investment Sum | 2,38,000 | – |
| Taxed Amount | 7,000 | 45,000 |
| Tax to be paid (at 30%) | 2,333.33 | 15,000 |
| Returns after tax | 42,666.67 | 30,000 |
How to calculate the Inflation Rate?
MOSPI analyzes every month’s Consumer Price Index Rates CPI. ex August 2018 CPI Pdf
This year Price -Last year Price*100
12-10= 2*100 =2%.
2008 financial crisis
buy now and EXPECT that the value skyrockets,
EMI VS SIP
| Home Loan | Equity SIP | ||
| Loan Amount | 25,00,000 | Monthly SIP | 5000 |
| Rate of Interest | 9.35% | Expected CAGR* | 15% |
| Monthly EMI | 23,000 | SIP Tenure | 20 Years |
| Total Payment (20 Years) | 55,20,000 | Value of Maturity | 75,79,775 |
| Towards Interest | 30,20,000 | Total Principal | 12,00,000 |
| Towards Principal | 25,00,000 | Total Expected Return | 63,79,775 |
| Net Gain through SIP* | 8,59,775 | ||
Note: *Net Gain through SIP
compound annual growth rate CAGR