11 Investment options for individuals and the common financial mistakes made by startups
A quick overview of the investment options
CA Neetu Jain
1. Mutual Funds
There are low-risk mutual funds and high-risk mutual funds. One can pick-up based on their risk appetite and tenure of investment.
2. Health insurance
Health insurance will help you cover for medical expenses without which the skyrocketing medical bills could create a dent in your savings.
3. Public Provident Fund
PPF is a risk-free investment. The current rate on PPF is 7.1% and is revised by the Government every quarter.
4. Recurring Deposits
Can open the RD account within your own bank and deposit a certain amount into this account every month. You will get the interest amount along with the principal amount post the maturity period.
5. National Pension System
NPS is also a Government-backed scheme wherein you can invest in equities and debt, and the final pension will depend on the returns from these investments. It is open to anyone between the age of 18-60.
6. Post Office Monthly Income Scheme (POMIS)
This is a savings scheme which is Government-backed and allows investors to to get regular monthly income. The lock-in period is 5 years.
7. Initial Public offering
You can keep reviewing IPOs in our blog where we provide pros and cons. This way you would get unbiased investment advice.
8. Real Estate
Real Estate is one of the fast-growing sectors in India right now. Retail investments are one of the safe investment options. You can invest in Commercial or Residential properties or invest in Real Estate Mutual Funds.
9. Gold Bonds
One can invest in sovereign gold bond scheme which can fetch you interest rates of 2.5% per annum and maturity value of equivalent value of gold after 7 years.
10. RBI Taxable Bonds
RBI has 7.75 percent savings taxable bonds. They are issued in demat form and has a tenure of 7 years. They are issued by Bond Ledger account of the investors.
11. Bank FD
Sectors for long-term investments in India
1. Information Technology (IT)
Currently, it’s the time for information. As a general matter of fact, IT companies are growing at a much faster rate compared to the manufacturing companies.
A few of the major players like IT Industry like Tata Consultancy Services, Infosys, Wipro Limited, HCL Technologies etc.
2. FMCG (Fast-moving consumer goods)
FMCG is the most defensive sector for long-term investment in India. Few FMCG companies like #HUL, Dabur India Limited , Emami Ltd , ITC Limited , Nestlé etc are common names in Indian-houses.
If you are looking for a safe industry to invest, then the FMCG industry is one of the best sectors for investment.
3. Automobile Companies
According to a CNBC report forecasted a number of electric vehicles on the road around the world will hit 125 million by 2030.
Auto Companies: @M&M, Tata Motors, Maruti Suzuki India Limited, TVS Motor Company, Hero MotoCorp, Bajaj Auto Ltd etc.
For growing countries like India, the growth is the infrastructure is the fastest. Infra companies are the key players in the growing countries. Few major players are Larsen & Toubro Adani Ports and SEZ, #GVK etc.
𝐂𝐨𝐦𝐦𝐨𝐧 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐌𝐢𝐬𝐭𝐚𝐤𝐞𝐬 𝐒𝐭𝐚𝐫𝐭𝐮𝐩𝐬 𝐌𝐚𝐤𝐞
1. Not having a budget or plan
The key questions any budget or business plan needs to answer are:
- How is going to make money?
- How is going to spend money?
- What are the unit economics of your business model?
- How do you generate cash?
- When are you going to be break-even?
- How and when can you achieve your strategic milestones?
2. Getting too much debt early on
- It’s not very smart at all for a startup to get into debt before they even really get going.
- The longer it takes you to get a positive cash flow, the more debt you are going to accumulate.
- Debt management and prioritization tools are a must for running a Business.
3. Employee Cost
- A big mistake many startups make is to hire too quickly. Too many employees is a huge drain on your funds.
- Startup should hire as their Business Grow.
4. Lack of understanding about marketplace
- Who is your customer?
- What need does your product/service fulfil?
- what do you have to offer?
- Who is your competition?
- What differentiates your offering?
- What trends may affect your market—and how?
CA Neetu Jain
Founder Easy Tax