How can SMEs earn handsome income without taking any huge risks using smart investment tools?
For most Small and Medium enterprises, a lot of their money usually lies in their current accounts which earns them zero interest. Most businessmen would want to use this money for immediate business related opportunities as a liquidity. This money could be in lakhs or crores.
But if one plays a smart game, they can easily create wealth without taking any big risks.
Let’s see how this could be done:
- If they park 3 to 6 months’ salaries of employees into Liquid Funds with Dividend Reinvestment option. The dividend so earned should go to Long Term Equity.
- The other money could be parked in medium to long term debt and small amount into equity in lump sum to the tune of 10 to 25% and start a good amount of SIP ranging from 10K to 50K as per long term goal of building capital.
This is very important as every business has a cycle. This cycle runs for a short period of time every year or for a longer term. The reason being, every business faces different set of challenges which can be due to government policy or competition or many a times the Regulator. Therefore, the invested amount can be used for increasing the turnover or starting a new vertical or expansion of business by acquiring new assets such as machinery etc.
These funds give return ranging from 6% to 10%, it will help in building big businesses from the funds which would in other cases would have given no returns at all.
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