I have been doing side hustles for long and made some money out of them too. But, you need to invest your money to multiply it (Mark Cuban is a big example here). Investing has its risks and fun.
First aim for successful investing should be to beat inflation. Your investment returns should be able to cover the rise in prices in the market, bank fixed deposits don’t help here.
So, am all set to start investing and making a decent money out of the money I have. Though I got a keen interest in US stock markets too, and to my surprise would have gained significantly on listing gains alone many a times, but investing in an IPO or in public sector companies through NASDAQ or NYSE is not that easy. That when you are sitting in India and value of rupee against dollar makes it harder to actually see value in a stock(or script).
In India, I have the following options for investing my money. Let’s explore!
1. Stock Market
Yes! That’s what comes into your mind when you start thinking about investing your money somewhere. But, is that safe? How can I safeguard my investment?
I have been burned at Dalal Street and hence came out wise. Never ever do day trading, no expert or self acclaimed Guru can get it all right, and don’t know why but I kept on finding the wrong calls. Stock market is news driven but the thing is a commoner like you and me is always late to that news as we are not professionally committed into this. Don’t try it, its definitely not worth it.
Political conditions and leaders play a major role as well. Trump Presidency boosted the US markets while Modi government has taken Indian stock exchange to all time highs.
Invest in residential real estate if you can find a good opportunity. Residential plots come comparatively cheaper, have bigger after sale market and you can see good returns within 2-3 years.
If you are just aiming for investment, don’t buy a flat or a built up house, future appreciations in their value is not much, plus rental income is not that great to shell out money in the beginning. Buy a residential plot but don’t buy an unapproved land, or a land on notary. Look for basic amenities availability and nature of your locality. Off areas even though are cheap won’t give you returns. If you are thinking of buying a residential plot away from the established areas of your town/city, look for connecting roads and prefer state highways for that. As a general rule, you should know the buyers ability to spend when you will be putting your property on sale, hence don’t go for an overpriced property as it would be difficult for you to sell it off afterwards.
Mutual funds are great if you are very busy to have time to look at where to invest your money or are ignorant enough to look at! But then again, some of the best fund managers manage your money there and its a great decision to park your funds in a consistently well performing mutual fund.
But, before investing in a mutual fund, search a lot about it and don’t go for recommendations put up on some websites as there involves some ‘origination fees’ which these websites get from the mutual funds and hence the so called experts are just not that reliable. You can also take a look at this website but don’t by their recommendations alone, treat it just as a comparison engine. I personally am not in a favor of mutual funds, I opted for a SIP( monthly systematic plan) of Reliance Mutual Fund and the results were not that great. Plus if someone else is managing your funds, where’s the fun in that!
Of late some fintech startups have come up with a direct investment model, where you can directly buy mutual funds without their involvement. That means at zero commission and hence a cheaper option.
Some portion of your income should be there, invested in these ‘secure’ investment options. Your investment in fixed deposits, saving accounts (Kotak etc giving interest rate of 6% for balances above Rs 1 lac), government bonds and PPF are secured by the government. That should come as a cushion when your other investments go wrong .
PPF and tax saving deposits can give you great returns together with saving some tax over there, only drawback is that your money gets parked for a long time. I preferred paying tax to the government :), I now think that was not a wise move on my part.
That’s a new concept here, just a few years old in India. If a friend of yours or someone you know is putting in his sweat and blood in a new startup and you believe in the guy and his business model, try investing a small amount in his venture for some equity. Though most of them fail, but you can hope to get an OLA, UBER somewhere to get you some 200-250 times return!
I invested in a crowd funding platform and a real estate startup, and lost my money.
That may surprise many, but I am old school. I believe that there may be a time when ATM machines or my ATM card won’t work on a bank holiday or when some natural disaster is there, like an earthquake or a storm etc and then ‘CASH’ becomes King!
Update: Of late I have been investing in domain names too. Not many would know that this is a very lucrative option to park your funds or do domain name trading. I started 6 months ago, and have been really successful at it. I will share about this industry and how you too can enter into it, in another detailed post. Cheers !!