Personal Finance

Investment Planning: How It Works to Make Better Financial Life

Importance Of Financial Planning

Have you dreamt of luxury trips or buying a huge piece of land to build a luxe villa or sending your children abroad to study? 

Well, planning your investments properly is the answer to all your dreams!

Planning investments help you start a wealth creation journey to attain all financial objectives like buying your first house, funding your children’s education, early retirement, or any other financial goals. 

Financial planning also helps you face the ups and downs of life, like unemployment, job loss or medical emergencies. To determine asset allocation, have a specified time frame, gauge your risk appetite, and then plan to invest your hard-earned money. Conventional investments like stocks, mutual funds, ETFs, commodities etc., are strong assets in an investor's profile. Adding a few alternatives can be a game changer as they add diversity, and are low in risk, with steady, healthy and lucrative returns. Here’s a look at the best alternatives that add impetus to your portfolio. 

Corporate Bonds

Corporate Bonds are debt securities issued to investors by the government or companies to raise funds from investors. These funds are further used by the issuing parties, i.e., the government or companies for operations.

High-rated corporate bonds have low-risk, high rewards that can scale up to 8 to 11% against traditional investment options like FDs. Also, the deposit tenure is only for 15 to 36 months for a ticket size as low as ? 10,000. Backed by secured collaterals, rated A and above bonds by reputed credit rating agencies like ICRA or CARE are considered low in risk. The bonds are held in the investor’s Demat accounts.

Inventory Finance

Inventory finance is gaining much popularity in recent times. It is an asset-backed investment option, mainly for investors who seek to earn high returns at low risk, compared to equity investment.

Inventory financing helps in earning yields up to 12% pre-tax returns within a short span of 1-13 months and with a low investment amount of ? 10,000. 

For example - You wish to invest in a private startup in India that manufactures new-age medical solutions. This company requires finance from investors for various equipment they need for manufacturing medicines. So, you invest in this company and earn a yield of up to 11.6%, while the company can run their operations safely.

Commercial Real Estate (CRE)

Conventionally CRE needs a huge capital investment. Alternatively, you can start by investing just ? 1 lac on a fractional CRE business model. 

The investor's dashboard displays prime CRE properties from top developers. These properties are further leased to marquee tenants and MNCs. Investors can earn quarterly rentals in proportion to the investment. 

To conclude…

These alternatives are not unheard of and some investments like corporate bonds and CRE have high investment sizes. So small investors reading this blog might wonder how these investments have been downsized. 

Grip has enabled small investors to reimagine their wealth creation journey to fulfil financial goals and objectives. An AI-focused digital investment platform; the investment options come in the smallest sizes easing affordability at minimum risk. Working on a crowd and fractional investment model, the platform breaks high-value investments into smaller sizes. Visit Grip to get a better idea of diversified AI and expand investments.

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Published on
January 1, 2023
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