FPJ Anniversary 2022: What Does the Future of Personal Finance Look Like? – Free press journal | Vette Leader

If you search for personal finance on Google, you will get over a thousand articles, blogs and newspaper links that suggest different methods

Improve your financial health and build wealth for your future. However, most of the information focuses on a few options that mainly deal with types of mutual funds and their benefits. But is personal finance limited to mutual funds only?

Or are mutual funds wiping out other investment opportunities?

No!

In March 2020, as Covid hit the world, government and banking regulators proposed new ways to get people investing their money.

With “contactless transactions” becoming the norm of every industry, Demat accounts opened in minutes without visiting an office, (Common Account Number) CAN made online operations smooth and online banking made transactions hassle-free.

While investing in mutual funds is inevitably demeaning, it can be worth exploring other avenues that may represent the future of investing.

Alternative Investment Funds (AIF): A unique type of investment in which funds from different investors are pooled and managed in a qualified group for the benefit of those investors.

Compared to mutual funds, AIF not only trade the traditional options of stocks or debt, but also invest in sectors such as private equity, hedge funds, real estate, etc. “Alternative” means investing in conventional and non-conventional ways to diversify your investments.

Bind

Bonds are debt securities issued by private and public companies to meet their working capital or capital expenditures. Another unconventional type of investment, albeit secure and profitable.

These bonds are rated by independent institutions such as CRISIL, which is similar to the CIBIL score. Here, a higher rating means more security on the bonds. The risk with this type of investment is minimal because it is not performance-related like stocks. There is the RBI Retail Direct Scheme where government bonds are also available.

peer-to-peer lending

This means that verified borrowers are loaned small amounts of money, but in an unsecured manner, but at a higher interest rate.

Various P2P platforms offer services for borrowers and lenders to meet and transact.

The lenders receive details of verified borrowers. The interest range is from 7% to 13% while funds can be provided from Rs 10,000 to Rs 50,000,000.

Equity capital

NSE and BSE listed shares are at your fingertips with the opening of a Demat account, which is now quicker than using a credit card. These investment options can carry a high level of risk, however, careful research and study of the companies could help identify the next Multi-Bagger stock.

Unless you’re a multibagger, you can always invest in blue chip stocks and enjoy the returns without spending mutual fund manager commissions.

Foreign Stocks: Recently, the SEBI and the stock market opened the most awaited gateway for investors to invest in foreign stocks. If you’re sitting at home now, you might own stocks in Google, Apple, etc. However, there are currently only a handful of stocks available for investment. These stocks could add value to your investment portfolio.

Unlisted Companies

This could potentially be a jackpot option if you had the chance to invest in one. Normally startups or unicorn companies always need money. If you study their finances and have confidence in their business project, you can get involved in the venture at a bargain price.

Once these startups or unicorns get their share of the success, you can sell the share to the promoters, either at existing valuations or if the shares are listed on any stock exchange, and make handsome profits.

Gone are the days when you had to visit banks to renew FDs or open recurring deposit accounts. Now it’s time to get online or switch your service provider. With “contactless delivery,” the world has moved to “contactless investing,” and this is the future of personal finance.

(Viral Bhatt is Founder of Money Mantra – a personal finance solutions company)

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