According to our parent’s generation, investments generally seem to mean Gold, Fixed Deposit, Post office related deposits, Provident Funds and for some crazy reason Life insurance policies.

Now I don’t really care for Life insurance policies as an ‘investment’, they are and should always be a safety net that you’re essentially buying.

The remaining things mentioned here do have some merit and should’t be discarded without examining how they can be useful to us.

At the same time, they should in no way be the only things we are investing in, because the returns here – while guaranteed are still LOW and most of them don’t even beat inflation. So you could be losing money or just keeping the value of your money static. And that really doesn’t help much.

Here are times when choosing a traditional investment (such as a Fixed Deposit) is actually useful to us –

1. Letting your emergency fund grow in silence. Instead of leaving the emergency fund that you have built up, sit in a savings account (earning 2-4% interest), put that thing in a fixed deposit.
   Work it while it’s patiently waiting for its turn to be used. Yes an emergency fund needs to be readily available to you, but at the same time, this is almost three to six months of your salary. Its quite a huge amount to be sitting and doing nothing. An FD or a fixed deposit can still be withdrawn within a day by paying a small fee. Advantage of doing this? Well, you’re not seeing the money on a daily basis, so you’re not tempted to use it on random buys that you think you NEED. Its strictly for what is deemed as an emergency ONLY. Read more about emergency funds and how to build them over here.
   
2. Short term once-in-a-while plans – ‘I want to buy the next iPhone!’ ‘I’m sick of sitting at home and working all day, I need a vacation!’. These are expenses that are not regular but are kinda big and will need to be planned. (or should ideally be planned and not hosted by your credit card). No one is stopping you from buying the phone of your dreams or treating yourself with a well deserved vacation. But you don’t want the added stress of figuring out how to pay for it when the time comes for you to buy it. ‘But I don’t know that I want the thing until I actually want it. And as soon as I want it, I NEED to HAVE it!, I cannot sit around saving for it!’. Gotcha. So don’t save FOR it. Just Save. Build a sink fund for the small joys in your life. You may not know what it’s for, but when you want to buy something, you already have seed money for it. Do this through transferring a certain amount (see you need to figure this out, this isn’t an investment but an expense that’s coming your way, so be mindful and careful about how much you put here) from your account into a recurring deposit. Set the deposit for six months and forget about it.
   
3. Guaranteed tax free income – Hey hey hey! Public Provident Fund here! I’ve spoken about this extensively as well. But this is a Long Long Long term investment that kinda sorta breaks even with inflation. The point is that the returns here are tax free and are guaranteed by the government. I highly suggest you invest in this right away, it helps to have a corpus slowly being built for your retirement. Literally anyone can open a Public Provident Fund. All you need to do is contact your bank and ask them to open one for you. I say MAX this out. Its a great hedge against the market as well, and it gives you the mental space to play with other risky investment vehicles.
   
4. Ze Gold Rush. Every time the market dips, Golden Goldy here soars
   And that’s one the main reasons Gold needs to be in the mix when it comes to your portfolio. Its the quintessential Indian family style investment. There are many ways to buy gold and many forms of gold. One thing I would suggest (but I haven’t yet tried this, so take it with a pinch of salt) is investing in gold through the Sovereign Gold Bonds. It matches the price of gold and you also get a guaranteed interest of 2.5%. While two percent isn’t a lot, it’s above and beyond the change in gold rate itself, which is kind of cool.
   There are also Gold ETFs that you can buy, one ETF here is equivalent to one gram of gold and it tracks the price of physical gold. I actually have Gold ETFs and it’s really easy to buy. It’s mostly stable. But adding an Equity ETF (Like NIFTY 50) into this mix might make it a more balanced portfolio for you to have However,
   I am wary of buying gold jewellery as an investment. This is because of all the making charges that go into actually creating that piece. I also wouldn’t suggest gemstones [hint hint – don’t buy diamonds as an investment, they’re only FOREVER because you’re stuck with them] as an investment. They’re pretty for sure, but they’re NOT an investment. You don’t really know their resale value and it might become incredibly difficult to find a buyer for it. If you want to buy physical gold, understand that you need to store it and that’s a separate headache all together. Lockers in banks charge you for it as well, so consider that with your cost of buying physical gold. I suppose gold biscuits and coins are a better investment than gold jewellery since the making charges for them is quite low in comparison.

So there you have it, don’t shoo away the ideas that the older generation gives you because you think crypto is the next best thing. Give the above a try, and build a strong foundation for your money.