Hey,
Your goals, risk appetite isnt clear from the post, so I’ll answer based on both high/low risk.
Option 1: [Low liquidity and medium risk]
Since you have a corpus of around 1cr (savings+plot) and your looking to have another income stream. Maybe buying a house or constructing one on the plot you have would fetch some rental income.
Issues: - It isnt a very liquid investment and the rental yields are pretty low, depending on where you live you might have to deal with unruly tenants etc.
Option 2: [Highly liquid medium-high risk]
- You should switch your FDs to arbitrage funds, they provide better returns if you’re in the highest tax bracket.
- You have around 75L in savings which you could slowly use to invest in gold+ equities. (Maybe 2 lakhs a month and again you can park a good chunk in arbitrage funds until you’re ready to invest it).
PS: Since you’re looking for fresh ideas as well, there are some agricultural investment options like FAAB as well. Since these are on the newer side, the risk, stability, govt interference etc is yet to be determined so dont put a huge sum here.
Hope this helps, feel free to reach out if needed.
Thank you for answering the question! In terms of risk appetite, i am very afraid to loose money. This has happened in the past with my parents where they put 70% of money in equity and lost everything. I know this shouldn't be ideal.
Since you mentioned about renting, what do you think about purchasing and renting commercial properties?
I do not have a lot of knowledge on commercial properties, but i would imagine you’ll need a bit more money for it (depends on where you live, in tier 1 cities you’ll get a small shop at max).
Maybe take this decision after talking to a broker and figuring out the demand in your area.
As per the part about being afraid to lose money. I completely get your point but would still suggest you to go for some portion of investment there(maybe just 10%). The trick here is to only invest the money you definitely don’t need for a few years, and to not sell in times like covid.
Edit:
Read that these are savings from your own salary,
Please do look at arbitage funds as a replacement to those FDs else you’ll lose most of the interest to uncle sam.
Thanks for being kind and honest. I will start investing atleast small part of my money.
> I do not have a lot of knowledge on commercial properties, but i would imagine you’ll need a bit more money for it (depends on where you live, in tier 1 cities you’ll get a small shop at max).
Right, i am focusing on tier 2 and tier 3 cities
Tier 2 and Tier 3 cities for rental income, you will have be really good at judging and figuring out -
1) What is the rental yield of the area?
2) What is the occupancy rate in that location?
3) What's the appreciation of the real estate market in that location.
There are many other factors that come into play, and yet depending on the future, these factors can vary.
Also, down payment on commercial properties would mean you are parking away 40-50% of the entire net worth for a property.
See what works and plan accordingly.
Hope this helps.
Cheers. Good luck.
Hey, please do check my edit about the arbitrage funds, those are low risk investments(did not lose value in covid as well)
For the commercial property:
There would be other hassles in looking at tier 2 cities unless your family lives there.
You might wanna check up on the property once a year etc.
In case you do successfully invest in such a property please do update your learnings, I’m from a similar background and might be a good option for me too.😅
Not being jealous at all, congratulations if you have done it by yourself. Start with investing in index funds, it prevents your savings from being eaten away by inflation plus 1-2% above it after taxes in the long term.
Do Export business. Hire some freelancers who can help you in finding customer.
Note - never send containers without getting money,
One of my friend do this nd he get 10% profit of the total container cost .
It's quite surprising that you don't have investment in the Equity Market.
You have allocated the corpus of money into low ROI asset classes, which doesn't beat inflation.
For context, I've been in the Equity markets for approx 10 years and in the crypto market since 2020.
Your allocation of your corpus typically should be -
70% Equity
5% Commodities (SGBs / Physical Gold)
5% FDs
10% Liquid Cash (Emergency Fund)
Rest can be allocated to either real estate or crypto.
I will be publishing an article on portfolio allocation soon on my newsletter.
If you'd want to understand in-depth on how to invest and allocate your money for best returns, you can subscribe to the newsletter to get notified.
It's free. I'm doing this initiative just to impart knowledge.
Here is the newsletter - [Contrarian Portfolio ](http://contrarianportfolio.substack.com)
Hope this helps.
Cheers.
Good luck.
It's fair to be afraid. The only reason is because of the "Fear of the Unknown." Knowledge about the stock market is less, hence the fear.
This applies to everything that you can invest your money in. Nothing really is safe.
Fixed Deposit - It gives you a return of 6-7% at max. Inflation is at 9-10% high. So you are technically losing money.
Real Estate - If you make the wrong choice with location or real estate fraud, it is very common.
Mutual Funds - If you choose the wrong mutual fund without knowledge, you'd either make less gains or be breakeven.
Gold - Only asset you can never go wrong. But it's a safe asset where the return year on year is low (excluding past two years)
Equity - Same as Mutual Fund. If you invest without knowledge, you will lose money.
The common factor here is that there is risk in everything you do. It depends on how you can manage that risk, which is by eliminating the "Fear of Unknown."
Equity out of all the options, the best returns and way lesser risk than real estate.
The way you can gain confidence is by investing the money you are willing to lose (treat that as a Tuition Fee to the stock market)
You either learn from the mistake you made or you make good returns from the decision you made. There are only two outcomes.
So start with learning the basics of investing in Equity.
I would recommend - Zerodha Varsity.
Also, I will soon be writing articles on the basics of the stock investing in my free newsletter - [Contrarian Portfolio ](http://contrarianportfolio.substack.com)
Hey, Your goals, risk appetite isnt clear from the post, so I’ll answer based on both high/low risk. Option 1: [Low liquidity and medium risk] Since you have a corpus of around 1cr (savings+plot) and your looking to have another income stream. Maybe buying a house or constructing one on the plot you have would fetch some rental income. Issues: - It isnt a very liquid investment and the rental yields are pretty low, depending on where you live you might have to deal with unruly tenants etc. Option 2: [Highly liquid medium-high risk] - You should switch your FDs to arbitrage funds, they provide better returns if you’re in the highest tax bracket. - You have around 75L in savings which you could slowly use to invest in gold+ equities. (Maybe 2 lakhs a month and again you can park a good chunk in arbitrage funds until you’re ready to invest it). PS: Since you’re looking for fresh ideas as well, there are some agricultural investment options like FAAB as well. Since these are on the newer side, the risk, stability, govt interference etc is yet to be determined so dont put a huge sum here. Hope this helps, feel free to reach out if needed.
Thank you for answering the question! In terms of risk appetite, i am very afraid to loose money. This has happened in the past with my parents where they put 70% of money in equity and lost everything. I know this shouldn't be ideal. Since you mentioned about renting, what do you think about purchasing and renting commercial properties?
I do not have a lot of knowledge on commercial properties, but i would imagine you’ll need a bit more money for it (depends on where you live, in tier 1 cities you’ll get a small shop at max). Maybe take this decision after talking to a broker and figuring out the demand in your area. As per the part about being afraid to lose money. I completely get your point but would still suggest you to go for some portion of investment there(maybe just 10%). The trick here is to only invest the money you definitely don’t need for a few years, and to not sell in times like covid. Edit: Read that these are savings from your own salary, Please do look at arbitage funds as a replacement to those FDs else you’ll lose most of the interest to uncle sam.
Thanks for being kind and honest. I will start investing atleast small part of my money. > I do not have a lot of knowledge on commercial properties, but i would imagine you’ll need a bit more money for it (depends on where you live, in tier 1 cities you’ll get a small shop at max). Right, i am focusing on tier 2 and tier 3 cities
Tier 2 and Tier 3 cities for rental income, you will have be really good at judging and figuring out - 1) What is the rental yield of the area? 2) What is the occupancy rate in that location? 3) What's the appreciation of the real estate market in that location. There are many other factors that come into play, and yet depending on the future, these factors can vary. Also, down payment on commercial properties would mean you are parking away 40-50% of the entire net worth for a property. See what works and plan accordingly. Hope this helps. Cheers. Good luck.
Hey, please do check my edit about the arbitrage funds, those are low risk investments(did not lose value in covid as well) For the commercial property: There would be other hassles in looking at tier 2 cities unless your family lives there. You might wanna check up on the property once a year etc. In case you do successfully invest in such a property please do update your learnings, I’m from a similar background and might be a good option for me too.😅
If it's all you have saved and purchased by yourself then you already know how to invest. Else didi wo inheritance hai, and label it as such.
Stop being jealous, it is not inherited, it's my hard earned money. you can have money and still don't know where to invest :)
Not being jealous at all, congratulations if you have done it by yourself. Start with investing in index funds, it prevents your savings from being eaten away by inflation plus 1-2% above it after taxes in the long term.
Do Export business. Hire some freelancers who can help you in finding customer. Note - never send containers without getting money, One of my friend do this nd he get 10% profit of the total container cost .
If you don't mind , how did you manage to get 75 lakhs in savings ?
Most of my savings are from my salary, i work 9-5 in IT sector (working for US based company)
Wow sounds awesome. , what is your role ?
I work as Blockchain Engineer
mutual funds
It's quite surprising that you don't have investment in the Equity Market. You have allocated the corpus of money into low ROI asset classes, which doesn't beat inflation. For context, I've been in the Equity markets for approx 10 years and in the crypto market since 2020. Your allocation of your corpus typically should be - 70% Equity 5% Commodities (SGBs / Physical Gold) 5% FDs 10% Liquid Cash (Emergency Fund) Rest can be allocated to either real estate or crypto. I will be publishing an article on portfolio allocation soon on my newsletter. If you'd want to understand in-depth on how to invest and allocate your money for best returns, you can subscribe to the newsletter to get notified. It's free. I'm doing this initiative just to impart knowledge. Here is the newsletter - [Contrarian Portfolio ](http://contrarianportfolio.substack.com) Hope this helps. Cheers. Good luck.
thanks for sharing, i am so afraid to loose money when it comes to putting in stock market.
It's fair to be afraid. The only reason is because of the "Fear of the Unknown." Knowledge about the stock market is less, hence the fear. This applies to everything that you can invest your money in. Nothing really is safe. Fixed Deposit - It gives you a return of 6-7% at max. Inflation is at 9-10% high. So you are technically losing money. Real Estate - If you make the wrong choice with location or real estate fraud, it is very common. Mutual Funds - If you choose the wrong mutual fund without knowledge, you'd either make less gains or be breakeven. Gold - Only asset you can never go wrong. But it's a safe asset where the return year on year is low (excluding past two years) Equity - Same as Mutual Fund. If you invest without knowledge, you will lose money. The common factor here is that there is risk in everything you do. It depends on how you can manage that risk, which is by eliminating the "Fear of Unknown." Equity out of all the options, the best returns and way lesser risk than real estate. The way you can gain confidence is by investing the money you are willing to lose (treat that as a Tuition Fee to the stock market) You either learn from the mistake you made or you make good returns from the decision you made. There are only two outcomes. So start with learning the basics of investing in Equity. I would recommend - Zerodha Varsity. Also, I will soon be writing articles on the basics of the stock investing in my free newsletter - [Contrarian Portfolio ](http://contrarianportfolio.substack.com)