The final two years have taught us one lesson, it is very important be ready for uncertainties.
Just as the worldwide financial system was limping again to normalcy following the unprecedented onslaught of COVID-19, provide chains and costs of important commodities the world over obtained battered by the Russian invasion of Ukraine.
Shiv Parekh, Founder of hBits says, “Within this climate of economic uncertainties, we now live in a time when the second source of income is no longer an option but almost a necessity. Even if one can hold on to one’s job, rising costs and shrinking savings may result in loans and the creeping pressures of debt.”
Below are a few key the reason why a second revenue is essential;
Mitigating Rising Expenses and Inflation: Incomes have stayed almost stagnant whereas costs of necessities together with petrol, diesel and LPG have skyrocketed. Parekh says, “Traditional means of investment like fixed deposits (FD) are struggling to remain viable, as it no longer keeps up with the annual increase in the rate of inflation.”
Preparing for an Emergency: Financial emergencies equivalent to job loss, well being crises and hospitalisations have sadly seen their worst side, over the past two years. In such sudden financially exigent conditions, consultants say the inventory market or mutual funds might not all the time assure a enough yield. Some might need to dip into their provident funds or mounted deposits and face penalties.
Funding Financial Goals or Pursue Interests: According to Parekh, shopping for a automobile, enrolling in an upskilling course, occurring that dream trip to Machu Pichu or just pursuing a ardour are such objectives which may be funded by a second revenue.
Retirement Corpus: Given that private-sector jobs don’t supply pension schemes and retirement planning on a single revenue can create stress on one’s expenditures, consultants say a second revenue supply seems important in the direction of making a sustainable retirement corpus.
What are you able to do?
Parekh factors out, “When one thinks of a ‘second source of income, one invariably thinks of dividends received from stock assets or rental income from residential property. However, it is wise to explore an asset class like real estate that offers greater stability, given the volatile market conditions.”
He additional provides, “This is where commercial real estate (CRE) can offer steady returns, higher than residential properties and with less risk.”
Fractional possession of property refers to a bunch of traders pooling their funds to collectively buy actual property, to allow them to cut back the associated fee burden and threat publicity and share the rental revenue.
“It is particularly ideal for investing in Grade A Commercial Real Estate (CRE), the cost of which can run into hundreds of crores, but requires merely Rs 25 lakh from each investor. Such premium CRE usually yields high rental returns of 8 – 10 per cent,” explains Jain. This means an funding of Rs 25 lakh might yield roughly Rs 1.5 lakh to Rs 2.5 lakh each year.
Source: www.financialexpress.com”
