Savings and Investment calls for a lot of strategic planning. An individual has do a lot of pen and paper planning to set a strong savings & investment plan flowing. Savings is mainly done to meet the after-retirement requirements. But generally the savings are never sufficient to maintain the same standard of living after retirement. Hence people often opt for investment to multiply the money faster. The situation is worse for those people who have not started to save and invest early and they are on the brink of retirement only five-ten years form now. For such people I will suggest following investment strategy that will make an investor earn a regular income for long term:

Dividends

Invest in stocks that pay high and regular dividends. Whenever a companies makes profit they have two choices, either they can pay dividends to its share holders or else they can use this profit to expand and modernize it in order to increase the market price of stock. The second option is always preferred by excellent companies but generally all companies resort to a combination of both options. Companies use a part of the profit to pay dividends and balance to expand and modernize the plant. Or else an investor can also find dividend paying mutual funds and invest their money in them.

ETF

Exchange Traded Funds (ETF) is another option that can give substantial growth to an investor’s capital. But this is an investment option that must be given time to show results. If an investor has 7/10 years time before retirement, they can opt for ETF. These funds are designed to track index or performance of a particular sector of industry. Unlike mutual funds, ETF has a very low operating costs hence can be far more rewarding than traditional mutual funds in long run.

Companies Deposits

These types of deposits will give predefined returns no matter how good or bad the stock market is behaving. These deposits are particularly suitable for people who are very close of retirement and have very low risk profile. Companies Deposits pays generally higher returns than bank deposits but the lock-in period is much higher (3/5 years). People who has some cash and do not want to get exposed to risky equity can go for companies deposits.

All the above three investment option can be very rewarding in term of long term perspective. They will not only save your capital form inflation bust also give you additional growth. The levels of dividends cannot negate inflation but add this with the growth of market price of stock and you see your profit rising.

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