When I started my career in 1996, I was only concerned about my salary. I only knew that the more money you earn, the more money you can have. I did not have much idea about investing neither any one guided me. As tax filing return dates used to approach, financial consultants would request me to take Insurance policy to save tax. I was happy to invest in the same. I felt happy while investing in such tax savings scheme considering that I have reduced tax liability. I never gave a thought that how much returns it would generate over the period of time.
In next 2-3 years of my career, I learnt about putting surplus money in NSC, PF, which used to give good 10-12% returns.
Then In subsequent 4-5 years as my wisdom grew, I understood that investing in IPOs, equity and mutual fund gave good returns. So, I started SIP in some mutual funds and also invested in IPOs with whatever little knowledge I could collect from newspaper and investor friends. It definitely gave me better returns than FDs and the money started growing up. I am still invested in the same as well as continue investing in mutual funds and equity.
After around one decade of experience, I further learnt that investing in property gave good returns. So, I tried that. Yes, although the money doubled in 5-6 years, I still felt that the growth rate had either slowed down or was too slow.
In last 2 years, I learnt something new. That was about another class of investment – whereby if you invest in startups by lending some money, you get good return for risks you have taken. So, I tried my hand at that and invested in Rent-o-mojo startup, which gave me hope of doubling money in 3 years. However, Rent-o-mojo didn’t live up to the hopes it showed when it was asking for investing.
Last year I learnt about bitcoin and invested small amounts in that, which obviously grew multi-fold in few months. Although there is no guarantee that it will sustain inflated valuation but people will be happy if it crashes considering that most of them have missed the bus.
Then in last 6 months, I learned about investing in my friend’s business offerings (options hedging), which started giving me monthly 3-3.5% returns (annually around 40-45% returns). I felt that I have found my mojo and wisdom tooth. :-).
Only at this juncture I realized that had I invested in this form of investment even a decade back, I could have retired by now. In short, I feel that money should work for you and you should not be working for money. Unfortunately, My retirement has got extended by ten more years now due to late realization.
Now, I have learnt – it’s not that how much you earn that makes you richer but how you manage your money that will make you laughing all the way to the bank.
Although I am not a certified financial planner, do contact me for free advise if you want to know more about any of the investment class.
An unwanted piece of advise – Do not keep more than 10% of your savings in fixed deposits which will be just contingency fund. Fixed deposits gives you negative returns.
Please note that MF will give. on an average 15% cumulative returns over the longer duration (3 to 5 years or more). So, for risk averse people, this is the best option available in the market.
What is your investment class which has given you best return on year-on-year basis? Please share your views personally or by leaving comments below!
Fabulous article! Simple yet effective. Keep posting such words of wisdom!
Hi Biren,
Can you please explain detail about options hedging?
What re the risks involved on losing the capital?
Options hedging can be done only by expert/fund managers. A friend of mine runs the company & I have just given money to him. He manages the show & gives me profit every month after taking his commission. This turns out to be around 35% on my cash amount and 18% if we include MF given as collateral. I am invested since 10 months now & I am getting regular returns without any followup. Its as safe as putting your money in FD.
Hi Biren,
Is there anyway I can get in touch with you regarding the option hedging scheme? I want to know more about it. If possible, kindly drop an email to me.
Thanks Biren for this useful article and sharing different options of investment. I’m interested in Option hedging, I have just heard about this term, want to know more details about it.
Appreciate any help from you on this.
I have read and it was explanatory and useful.Anyhow i have to clarify one or two.
1.How many % of our mutual fund value/investment cost can we get as loan if it put into colleteral?
2.Can you explain about hedging or different option so as to protect our amount and to increase our return safely?
3.Can you refer the company to do this kind of investment?
P ldo not take it as wrong.pl reply to my email address.thanks in advance.
The experience that you have shared will definitely help many of us who don’t think about investment seriously. Even I didn’t had much idea when I started earning money and I realized it very late that money should grow and that growth will happen when we put the money in proper channel through investment.
FD and PPF in addition to NSC was the options that I had started with and that too for the benifit of taxation, to save tax. It was much later when I opted for MF but for the same purpose of saving tax. This article will surely help people to take risk and think investment as not only a way to just save tax but also to properly plan and let the money grow by thoughtful investment.
Thanks for sharing the knowledge with this nice article.
Good read Biren. Our generation has definitely benefited by fruitful investment avenues which has also consolidated our finances.
Biren Bhai your analysis on the subject has been of great help as it uncloggs the clutter of technical lingo of complex mathematical and structural halo created by certain financial companies to project X amount of growth in Y amount of time. Some Banks do the same too. A simple guided approach like your notation works wonders in reaching a financial solution.