THINGS YOU NEED TO KNOW BEFORE YOUR INVESTMENT

Recently invested somewhere and expecting for high returns?

Don’t fall for false hopes given by wrong people. Be reasonable!

In this world of rising and falling economies, there are a lot of people running after various sources to invest their hard-earned money.  Most of them expecting a high rate of return and thus investing their earnings on dodgy sources. The investors are just interested in the high returns and put in all they have into one same basket. There is always a ‘behind the stage’ story which occurs in parallel to it.

The managers of various Corporative Society banks place the trap right way to get some prey, even though the financial advisors who believe in their ethics won’t fall to it. But, the investors running after quick money must realize the truth beyond the high rates of returns. By the showcases of higher returns, there are economic activities backing the institutions’ income. For instance, on a side, where they are giving a return of 12% to the investors, they are also injecting the Agents with 2% brokerage for getting them more investors. They may also have other office expenses and human resource expenses which may incur almost 3% of their overall deposit. So, if they are having a total cost of borrowing is approx 16-17%, they will be taking at least 22-24% interest from the lenders to cover all their costs. And suppose if any borrower is returning at the rate of 24%, what kind of business they may be doing which is bringing them more than a return of the above said 24%?

If the borrowers are capable to pay the return at the rate of 24%, then they may be having at least a profit of 30%. Yeah, that’s a pretty good stat! But, also it is absolute non-sense if one puts in their money to invest in it. Neither, any smart financial advisor will suggest you to make investments under any such stupidity. Just think for a moment…which business can grow year & year @30%. There can be few phases of such high growth but such high growth cannot last long. “Cheetah can run up to 100 miles per hour but it can only maintain this speed for very short distance…….THINK AGAIN

Better if the investors are aware of this. Don’t just close your eyes and trust on the decisions taken by the Agents. Be reasonable in case of your return expectations. The best and trustworthy financial advisors will always have schemes with a reasonable return rates and advice you not to run after quick money. Don’t just fall for the false hopes shown by greed ridden ones.

Author:

SLA Financial Solutions is a Leading Advisory firm based out of Jaipur. We are amongst the top 5 Financial Advisory firm with a team of 20 + people. We have been awarded twice by CNBC as best Financial Advisor across North India.