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Benefits of Investing for the Future as an Indian Expatriate - Everything to Know

15 Aug 2023


One of the reasons for migrating to developed countries from India is the lack of reasonable jobs in their native country. Small jobs and temporary laborious work are aplenty in India but are insufficient to ensure financial viability. 

This escalates poverty.

Therefore, Indians travel to developed countries to find jobs with better financial prospects. They earn a living there and send money to India to financially support their family.

 

But do you think it is only the financial help Indians need from their migrant family members? Is this financial aid meant to help them lead a financially decent life in the present alone? Does the current financial aid have anything to do with the future and its financial security.
 

It seems obvious that if the purpose is to help your family financially in the present, then earning a living in India may suffice. But if you want to secure your future financially, you might consider working abroad.

Because a temporary job can help you make ends meet, but it is insufficient to allow savings to invest. Right?

 

This means that the financial security of your future comes with investments.

This blog will shed light on the options of investments you can have as an Indian migrant and the advantages of your investments.

 

A Brief Background and Insight into the Context

Although a small income can help you live a life which is, needless to say, financially challenging, it cannot allow you room to save.

And if you cease to save for the future in the present, the cycle of poverty will continue, and your children will suffer financially the way you have or still are. And this you would never want for your family.

 

Therefore, millions of Indians earn a living in foreign countries and financially support their families back home through a money transfer to India.

This financial compulsion is a major reason for pushing Indians out of the country. These people carve their way out of India to travel abroad.

 

If you are looking for a comprehensive guide for moving abroad from India, take a look HERE.

 

An NDTV report revealed recently that the Indian diaspora is the largest worldwide, with over 18 million people. They are making huge financial contributions to the country’s economy through the remittances they send back.

 

Indian Union Finance Minister Nirmala Sitharaman was quoted as saying that the Indian migrants sent back a hefty amount of $100 billion in inward remittances in 2022.

 

A large chunk of the remittances Indians send back go into savings, which are then used for investment purposes to save their financial future and get other advantages.

 

Let’s now understand the investment, its major advantages and the options to invest your capital as an Indian migrant.

 

Understanding Investment

An investment can be understood as an item or an asset you have purchased after saving money over time. The purpose of investing your money in such an asset, which can be gold, real estate, stock, bonds, and so on, is to generate income or appreciate its value.

Appreciation, in this context, refers to an increase in the value of the asset over time. For example, you purchased a piece of land for Rs 1 million in 2020. It will be worth Rs 1.5 million in 2023. This half-a-million increase in its value is what is referred to as appreciation.

 

Types of Investments

Where you can find several options to invest your savings in, investments broadly come in two major following types.

 

Short-Term Investment

Short-term investments are also known as marketable securities or temporary investments. You can easily convert these short-term investments to cash. But the average time any short-term investment takes is about five years. But this is the average time.

Most people convert their short-term investments to cash in about 3 to 12 months.

 

Long-Term Investments

Long-term investment cannot be converted to cash quickly and easily once you have invested money in it. This investment is held over several years.

Normally, you will find several Indian migrants who send money to India online for financial support, trying to save money to make long-term investments. 

A prime example of a long-term investment can be gold, real estate or a fixed deposit.

 

Advantages of Investing Money

Following are a few advantages of investing money for the future.

 

Financial Independence

The first advantage is that it makes you financially independent. Since you have saved your money which you have invested in different options, you will not need financial help from outside if needed, as your assets will support you.

 

Mental Peace

Mental peace is talked about much nowadays. It has a direct bearing on your life and all its sides, including personal and professional. But your financial viability can offer you much mental peace, which you would lack if you were sitting on a heap of debts and other unmet financial obligations.

 

Low Debt Requirement

With investments as a priority, you will slash the costs that will accrue otherwise. This will lead to savings which will give you enough room to manage your finances without having to acquire loans and debts.

 

Income Source Post-Retirement

Let’s face it!

Your job abroad will come to an end one day, and you will not be able to work anymore as you age. There your savings and investments will serve you financially and provide you with a steady income stream whose need is extremely pressing by then.

 

Guard Against Inflation

Your savings and the ensuing investments serve as a guard against inflation, both present and in the future if it occurs. Through investments, you can bear the inflationary burden without landing in financial distress.

Take a quick look below at the best investment options Indian migrants have in India in 2023.

 

Best Investment Options in India in 2023

  • Pradhan Mantri Vaya Vandana Yojana (PMVVY)
  • Real Estate
  • Senior Citizen’s Savings Scheme
  • Equity Mutual Funds
  • Direct Equity
  • Public Provident Fund (PPF)
  • National Pension System (NPS)
  • Debt Mutual Funds
  • Fixed Deposits (FD)
  • Gold

Wrapping Up the Discussion

Investments stem from savings. Right? And your online money transfer to India can either help you save money on transferring funds or can slash your funds by a big margin. Therefore, find a service provider like ACE Money Transfer that helps you save through low fees, live and market-competitive exchange rates, speed, safety, and much more with convenience.

FAQs

What is meant by investment?

Investment can simply be understood as the purchase of an asset or an item after you have saved money over time. Investment helps you generate income or appreciate the asset’s value.

 

What are the different types of investments?

Investments can be divided into two major types. One is the short-term investment, and the other is the long-term investment. The first one can be converted to cash easily and quickly when needed. But the second one takes a bit longer and involves technicalities before you can convert it to cash.

 

What is required to make investments?

The basic and probably the only requirement is to save money while you work abroad. You can save money by slashing expenses, creating a budget, creating an emergency fund, using public transport, and so on. 

 

What are the benefits of making investments?

Investments offer you mental peace, financial independence, and freedom from debt. It also provides you with a steady income post-retirement and saves you from the impacts of inflation.

 

What options do Indian migrants have to invest in?

Indians can invest in gold, real estate, direct equity, senior citizen’s funds, debt mutual funds, fixed deposits, equity mutual funds, public provident fund, national pension system, and so on.

Resources

  • Indian diaspora

(At 18 Million, India Has The World's Largest Expatriates Population (ndtv.com)

  • Inward remittances

($100 Billion Received In Remittances From NRIs In 2022: Nirmala Sitharaman (ndtv.com)


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