Don't Put Money In Bank : 5 Assets That Make You Rich In 2024 [2024]

If you and I, who are middle-class people, save one lakh and seventy-three thousand rupees in a bank, then after three years, it will become one lakh, seventy-three thousand, and seventeen rupees. I have used a 3% interest rate here because that is the average interest we get on savings accounts in banks.

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Now you might ask, who keeps their money in a savings account for so long? But sometimes, money can slowly grow without us even noticing. In this article, we will talk about the illusion of savings accounts where banks trick us and make money without us knowing. We will also learn how to escape this illusion and make more money without relying only on banks.

The Illusions of Bank Saving

Don't Put Money In Bank : 5 Assets That Make You Rich In 2024

The idea of bank savings is just an illusion. People believe that having a savings account will give them good returns and high safety. But, the truth is different. People work hard to get a good job and save their money in banks. Banks give you about 2.5-3% interest on your savings account. But, they lend your money to businesses and builders at higher rates, like 12-15%. So, banks are not making you rich, but they are making themselves rich with your money.

Sometimes, account holders face problems when banks get into trouble. There’s also another big reason why putting your money in banks isn’t the best idea: inflation. The interest rate you get in banks is about 2.5-3%, but India’s average inflation rate is 7.5%. This means that things that cost 100 rupees today will cost 107 rupees next year, but your money in the bank will only grow to around 102-103 rupees.

Inflation affects everyday items like petrol, food, and vegetables. It doesn’t include medical costs, education costs, clothes, or electronics which have even higher inflation rates of around 12-15%. So, you’re actually losing money by keeping it in a savings account. Bank savings accounts aren’t the best way to grow your money. Instead, focus on other investments and assets that can give better returns than banks.

Asset No.1: REITs, or Real Estate Investment Trusts

Ever since we heard about personal finance or wealth concepts, the book “Rich Dad Poor Dad” comes to mind. This book talks about investing in real estate to become rich. However, investing in real estate is not easy in India.

I will tell you about a way you can invest with very little money and still own a part of a property. This method is called REITs, or Real Estate Investment Trusts. You invest Rs 10,000 every month in a trust, and the trust invests your money in different types of properties. It gives you part ownership of those properties, just like mutual fund units.

By investing in REITs, you can put money into different types of properties like residential houses, retail lands with supermarkets, healthcare properties with hospitals and clinics, and office properties.

The benefit of investing in REITs is that the trust does not keep all the collected rent for itself. You can see returns up to 8-8.5% in REITs. So if not real estate, then Real Estate Investment Trusts can be a good source of income for you as an asset.

Asset No. 2 : Stocks And Index Funds

There are four ways to make money. First, get a job as an employee. Second, be self-employed. Third, become a business owner and start your own company. Fourth, become an investor by putting money into someone else’s business.

In recent years, more people in India have become business owners and investors. This has helped our country become the world’s fifth largest economy. Soon, we might even become the third largest economy.

Index funds are one way to invest. They include top companies listed on Indian stock indexes like Sensex and Nifty. These companies have high market values and are strong businesses. Instead of investing in individual companies, you can start with index funds.

You can also invest through monthly SIPs (Systematic Investment Plans) in index funds. In the past few years, these funds have given returns of about 13-14%.

If you want to invest in stocks directly, choose ones with a long-term vision. Pick three or four stocks to start with and invest little by little over time. This way, you can grow your money while learning about the stock market.

Asset No. 3 : Intellectual Property

I have a question for you. Today, if I give you two choices – either take two million rupees or two million followers, what would you choose? Many people might pick the followers because they have a lot of power today. People who make videos, podcasts, and write books create content that becomes their intellectual property. When you create something, you gather followers who can help your business grow.

For example, before becoming famous, not many people knew about Ashneer Grover. But when he appeared on TV and started using social media, his audience grew. He faced controversies but still continued to grow through podcasts and YouTube videos. As he launched his book, his fan base increased even more. So why did Ashneer build such a big fan base? Social media has great power for entrepreneurs.

The next thing to invest in is building intellectual property. It can be a book, a YouTube channel, or a website. The better your content is, the more followers you will have, and the better your business will be. This can give you great returns on your investment.

Asset No. 4 : Gold And Silver

Now we talk about the fourth asset, gold and silver currency. Gold and silver are the biggest real money assets. Investing in gold can be a game-changer. Let me tell you a story about two sisters, Ria and Kishori.

Ria and Kishori’s father sold part of his land and gave them money. He told them to save and use the money wisely. Ria saved all her money in the bank, because her father said so. Kishori saved some money but used 8 lakh rupees to buy gold.

In 2003, when Kishori bought gold, ten grams of gold cost five thousand rupees. So, she got about 1.4 kilograms of gold for 8 lakh rupees. Years passed, Kishori got married and had a daughter. She decided to give all the gold to her daughter on her 18th birthday.

By 2018, the value of that gold had grown a lot. If you want to invest less, you can try the government’s scheme called “Sovereign Gold Bonds” (SGB). It was introduced in 2015 by the government of India. You don’t invest in physical gold but digital gold instead.

Asset No. 5 : High Yield Govt Schemes

Next, we have asset number five: government schemes. If you don’t want to use banks and think everything is useless, don’t worry, there’s a solution. The government doesn’t want too much money in one account because it can cause high inflation later. To fix this, the government wants people to invest their money in different places.

The government has started many schemes where you can get more returns than from a bank and stay safe from high inflation. These schemes are like banks but better. Some people don’t even think about investing in these places, but they can be game-changers for your retirement. One example is the Public Provident Fund (PPF), which offers 7.5-8% interest. You can open an account at any post office and start with as little as 1,000 rupees. Plus, there’s a tax benefit.

Another option is Government Bonds issued by the Government of India, which can give up to 8-12% returns. The National Pension Scheme (NPS) is a retirement account that provides continuous income after retirement. You can invest up to 150,000 rupees and get a tax benefit, plus 7.5% returns.

The Sukanya Samriddhi Yojana (SSY) is for girl children and offers a 7.5 or 7.6% interest rate until they turn 18 years old. Before investing in these schemes, check the lock-in period because your money will be locked for a few years.

In conclusion, banks make money from our money while we’re happy with digital numbers. Inflation reduces the value of our money in banks over time. Look for better investment options like stocks and index funds, intellectual property, gold and silver, or at least use fixed deposits or schemes like NPS and PPF for retirement planning.