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Smart Investment Options For Self Employed

18 April 2022, 10:03 AM

Smart Investment Options For Self Employed

A self-employed person always looks for ways in which he can consolidate his earnings. This is large because he is self-dependent and doesn’t get a salary from anyone else. The wellbeing of his business, himself and his loved ones depends on what he earns. As a result, a self-employed person needs to be very smart with their earnings as well as their investments to ensure the wealth creation process is continuous and positive. If you are a self-employed person who is looking for some investment opportunities, take a look at the options listed below and select the ones that suit you best.

Investment Options for Self-Employed 

Mutual funds

Mutual funds are very well suited for self-employed people. A mutual fund is a very well-structured and professionally managed fund. As an inverter in a mutual fund, you do not have to spend too much of your own time researching stocks and bonds. This is an advantage a busy entrepreneur like you receives when investing in a mutual fund. Then, the option of investing lump sum amounts of money makes mutual funds very favourable. And finally, the risk is quite balanced here. Mutual funds are not as risky as the equity funds and fetch much much higher returns than the government bonds. 

Fixed deposits 

The next option available to you as a self-employed person is a fixed deposit. Fixed deposits are safe bank investment options. You lock in a lump sum amount of money which stays fixed for a pre-decided tenure. The interest earned is also fixed and constant. As a result, you get a good investment option at low or minimal risk. Fixed deposits are a good option for those who like to earn fixed returns in a low-risk manner, or for those who dislike taking risks in any manner. You can opt for short-duration fixed deposits or long-duration fixed deposits, based on your needs and requirements.

Shares and equities

Shares and equities are common investment options. However, there is a substantial amount of risk associated with investing in a share. While numerous people have benefited from the stock markets, many have lost their wealth at the same place as well. You need to understand the workings of the share markets and then invest. Remember, you are an entrepreneur, and your personal wealth will always play a role in the fortunes of your firm as well. So be careful, take risks only up to a permissible amount and then invest in shares that you feel will get you the highest and safest yields.

Government schemes

There are some excellent investment schemes that have been introduced by the government of India. You get many options here and most of these are safe investment platforms that offer fixed returns. Many of them also offer income options which prove to be helpful for self-employed people who may have a fluctuating income from their businesses. If you are an entrepreneur looking to invest in such a scheme, there are the best ones to choose from:

  • PPF - The Personal Provident Fund is a very handy post office saving scheme that offers fixed returns. You can invest annually in this fund and allow it to grow for 15 years. You get tax benefits when you invest in a PPF as well.
  • NPS - The National Pension Scheme is another handy post office casing scheme that allows you to save and build up a corpus for the later years.
  • PMJJBY - The Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance cover available at a very low cost. This is another good investment platform that you may consider.
  • Sovereign Gold Bond Scheme - The Sovereign Gold Bond Scheme is a safe and high-earning government scheme where you can invest in gold without having to personally own the asset.

Real Estate

As a self-employed person, it is a very good idea for you to invest in real estate. Real estate is always a good investment as you are bound to get returns. Rather than renting your office or factory space, try purchasing the property. Rather than paying rent, pay the EMI. Not only will you have a property in your name, but you will also be able to use it for mortgages and raise capital for your company as well when needed. 

Just remember to choose the real estate you buy with care. The location, the type of property, the price, etc will all play a role in ensuring you make a good investment. Your prime aim should be to get a good resale value, whether you plan to ever sell the property or not.

Self-employed or Solopreneur: Investment is a must

You may be a new business owner or a seasoned entrepreneur, investment is a crucial part of your financial growth. You may be financially stable or still struggling to find your foothold in the industry. No matter where you stand and what your economic health is, you definitely need to start investing to build your wealth which will also be helpful in tax planning. Try investing in the platforms mentioned above, as per your preferences and needs, and keep your financial health sound.