Youngsters are earning good salaries these days and displaying increased spending capacities. Instead of binge spending, why not trim the overspending habit with savings and investments?
Market-linked investments promise high returns at high risk and are not bad investments for those who have just begun their professional career. But if you are eyeing larger growth, alternative investments make more sense for the first-time investor.
Young earners are inclined to look for quick gains through investments. Some indulge in betting and high-risk returns in the share market and end up losing funds. Saving and making quick bucks is good, but one needs to have an informed approach. Maximise your savings and funnel them into lucrative investments. Here are some tips on how to start saving with little money and acquire higher returns on investment.
Short-term investment plans work for the early investor. SIPs are a great way to help your money grow. Mutual funds deliver 15% compound annual returns. So, if you can put in ? 5,000 for 10 years in a mutual fund, you accumulate ? 13.93 lakhs. That is not bad at all. If you double that SIP to ? 10,000 you get a 10% return with ? 20.65 lakhs in your account. Setting a target is the best way to help your money grow.
How Should You Maintain This?
Some experts advise setting aside 10%-15% as savings, and as the income starts moving up, you can expand up to 20%-25%. Your salary account can be given standing instructions of compulsory debit within 5 days of receiving your salary each month. This financial habit will help you spread your money in various investments like recurring deposits, SIP, and contributions in MFs.
This is a short-term investment where the investment capital is just ?10,000. It is a one-time investment over 24-36 months. You can earn returns up to 21% Pre-tax IRR. Companies need equipment assets for a business, but instead of buying and blocking capital on assets, these companies co-lease by inviting investors to purchase assets like machines etc., required for their business. In return, investors earn fixed amounts over the agreed period.
Have An Annual Investment Plan
By following a planned yearly financial goal, you get better financial freedom. A first-time investor can invest in short-term investments like recurring deposits, hybrid MF SIPs, post office schemes etc., or alternative investments like asset leasing, bringing higher returns in short duration at low risk over other investments. With forced saving, you can explore more alternative investment options that multiply assets in a short span.
Commercial Real Estate
If you are in the second stage of investment and willing to set aside a minimum of 7 years, investing in commercial real estate is a good investment. Here is how it works if you are investing through a fractional investment model. Top builders pre-lease commercial properties to MNCs and marquee Indian tenants for 5+ years. Now, this investment format traditionally demands high capital, but co-investment decreases the initial investment capital to just ?1 lac. The investors earn quarterly rentals, and the average yield is 11%. It is an asset-backed moderately risky investment which works splendidly for a first timer.
Build Long Term Investments
While the stock market can bring potential returns at high risk, commercial real estate can bring potential returns passively at moderate to low risk. This long-term investment can help youngsters build wealthy assets, securing future goals for starting a business or enrolling in technical courses.
Ask yourself, why are you investing? Is it-
Investment is a calculated move that demands focused growth and success. So, when the options are getting wider and more imaginative, why stay fixed on investments that bring low returns or highly unpredictable high returns? Be a prudent investor. Alternative investments in Grip are unconventional, non-traditional, and growing at an immense rate. This is where the future of investment is heading, so why should you be left out? Join Grip today!