A well-diversified equity portfolio of blue-chip stocks, or systematic investment and systematic transfer plans into mainline diversified equity mutual funds are wealth-enhancing (growth investments). Real estate is also a good, long-term growth investment avenue, provided you can manage its drawbacks.
The following are not part of a general investment plan. They form the basic financial foundation, on which you can add the superstructure of general investment.
• An emergency fund – this is an investment, but with an insurance-like objective. So, it’s not considered a part of the investment portfolio.
• A retirement fund – this is for a specific purpose: to cater to your needs after retirement or when your ability to earn has reduced.
• A house – the objective of this investment is to provide security and shelter to you and your family, not to encash the value when the price goes up. So, the value of a single residential house is not included in your investment portfolio.