Aditya Birla Sun Life Insurance Company Limited
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No two investors are alike. Investments are highly personal products, and there is no one-size-fits-all approach that works for everybody. There are many factors that affect the kind of investments that work for you, specifically. And here are some of the influencers.
Broadly speaking, however, there are two kinds of investing. Some people invest for growth. And others, for income. What are these approaches though? Which one works for you? And how do you go about investing for growth or income, as the case may be? In this blog, we'll answer all of these questions for you.
And as always, let's begin at the basics.
To understand the differences between investing for growth and investing for income, you need to first understand what they are all about.
Growth investing
Growth investing is a kind of investment strategy that helps your funds grow over time. The value of your initial investment grows over time, so you can build an investment corpus that can help you meet your life goals. The pace of growth varies across different investment options.
Income investing
Income investing, on the other hand, is exactly what it sounds like. It aims to create cash flow for you, so you can rely on the steady inflow of funds for income. Investments that give you periodical financial payouts can be used as a primary or an additional source of income. These payouts can be in the form of interest, dividends, or even annuity payments.
The basic objectives of growth investing and income investing are quite different. Understanding why each kind of investing is important can help you identify which one you should prioritize.
Growth investing
Growth investing is important for the following reasons:
Income investing
Income investing, on the other hand, gives you the following benefits.
Is there a right to choose growth investing over income investing, or vice versa? Well, the ideal approach would be having both these strategies in place, so you can build your initial investment amount over the years and also simultaneously set up a secondary source of income.
That said, there are some conditions that may be more favorable for growth investing, and others that may indicate income investing could be a better option. Let's take a look at when growth investing and income investing generally work.
Growth investing
Here's when you need to adopt the growth investing strategy.
Income investing
And here's when you need to adopt the income investing strategy.
So, once you have decided which approach to adopt—or if you've decided to commit to both growth investing and income investing—you need to know how you can implement this decision practically. To be more specific, you need to know how to invest for growth or income. Let's see how.
Growth investing
Here are some ways in which you can get started with growth investing.
Income investing
If investing for income is your priority, here are some tried and tested options that work.
That sums up the key differences between growth investing and income investing. Both growth and income are important goals to pursue, and as an investor it is advisable to balance the two efficiently. That way, you are sufficiently prepared for every major and minor life goal on your list.
5 WAYS TO GENERATE EXTRA INCOME
If you are looking for investments that can help you set up an additional source of income, there are many investment options that you can rely on. We have a blog that tells you about 5 easy ways to generate extra income.
A LIFE COVER + ASSURED ADDITIONAL INCOME: AND ONE PLAN THAT GIVES YOU BOTH!
That's the ABSLI Assured Income Plus for you. Invest for a short term and enjoy guaranteed income for 20, 25 or even 30 years!
Plus, you can choose the Income Benefit with Return of Premium option to earn extra income and get your premiums back.
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Get immediate income payout after 1 day of policy issuance^
Guaranteed# Income
Life Cover across policy term
Lumpsum Benefit at policy maturity.
Get:
₹33.74 lakhs~
Pay:
₹10K/month for 10 years
Guaranteed returns after a month¹
ABSLI Nishchit Aayush is a non-linked non-participating individual savings life insurance plan (UIN No 109N137V12)
^ - Provided 0 year deferment & Annually in Advance payout frequency is chosen at the time of inception of the policy. Annually in Advance payout frequency is only available in "Annual" premium payment mode.
~ Male- 25 yrs invests in ABSLI Nishchit Aayush Plan with Level Income + Lumpsum Benefit. He chooses premium payment term 10 yrs , policy term 40 years, benefit option -Long Term Income, Sum Assured 7 times of Annualized Premium and Deferment Period 0 years. Annualized Premium is ₹1,20,000 (Exclusive of GST.). Annual Income of ₹ 42,360 (42,360*40= 16,94,400) + Maturity Benefit (₹16,80,000)= ₹ 33,74,400
#Provided all due premiums are paid
ADV/10/21-22/1355