Ever felt like Robert Kiyosaki or Warren Buffett, who seem to turn everything they touch into a gold mine? Well, you don’t need to go that far for examples of smart investors.
Here are 4 such stories of smart guys closer home.
The plainly yellow farmers
Did you know that farmers can take gold loan at 4% interest rate? There was a time when crop loans were offered at 4%. Building on this idea, many leading banks and NBFCs are still offering farmers gold loans at 4%, as they could pledge their gold holdings for agricultural purposes.
A public sector bank official we talked to revealed that they were getting many short-term deposits from farmers. On digging deeper, he found something strange happening. Many farmers who were availing gold loan at 4% were investing them in short term deposits at 8%. Considering their financial situation, 4% interest too sounds good for them to create a corpus for their future.
But, the smartest move yet was made by those farmers who invested it in equity or corporate FDs at 12%. So a flat 8% returns on investments, even when they have nothing to invest! Is this the done thing? We don’t know. But, would Buffett agree it’s ingenious? We’d bet our dollar on that.
Who said Kisan Vikas Patra is not so attractive?
Suraj, a young Ahmedabad-based businessman, saw his business volumes peak during the 2008-2009 period. As he was reluctant to try his hands at equity, he started investing the profits he was getting in a traditional investment channel like Kisan Vikas Patra (popularly known as KVP). He started by investing Rs.20,000 every month in the scheme.
KVP doubles your invested money in 100 months. More than 5 years later, Suraj is now getting a passive income of Rs.40,000 every month, while his business continues to give him his regular income by way of profits.
If Suraj had invested his profits, which are not so predictable themselves, in equity in 2008-09, not only would he have lost hard-earned money, but he would also have lost capital that could have been reinvested back in his business should the need have arisen. Now, that’s called taking luck out of the equation!
Real estate is good if luck plays in your court
Vandana and her husband bought a flat at Chennai for Rs.18 lakhs in 2010. They rented out the property for Rs.20,000 per month for 5 years. They property was sold after 5 years for Rs.60 lakhs in 2015.
The couple got a return of 42 lakhs in just 5 years. This is apart from the rental income of Rs.12 lakhs they made during the same period. Real estate is a real smart move when it is made in a timely fashion.
Retirement plans are not just for retirees
Sidharth, a 26-year-old professional, was more disciplined in his financial life than his peers were. His goal was to park his savings from salary in an investment scheme that gave good returns as well as annuities.
If you thought he went the usual route as do all youngsters and parked his money in mutual funds or corporate FDs, think again.
Because, Sidharth went out and took a retirement plan from a leading life insurance company!
As per the plan, if he invested Rs.1 lakh for 5 years, from the 6th year onwards, he would avail a lifelong pension of Rs.36,000 per month. If he waited till 10 years, the returns would be Rs.50,000 per month.
With this additional income at his disposal, from the age of 36, he was to plan further investments as well as meet his lifestyle requirements, and still remain debt-free!
So, who are you? Savvy Sidharth? Property junkie Vandana? “Play-it-safe” Suraj? Or, a plain yellow farmer?