All of us would have heard about taking loan for meeting emergency needs or for covering expenses but not many know the benefit of taking loan for making money. Yes, taking loan for investment in profit generating investment is nothing but making money. At this point, you should be very sure that the return on your investment is higher than the principal amount and the interest you are paying on the loan. If this is the case then your loan is making money. It is considered wise to make use of loan for generating more and more money.
Here are some of the wise ways of utilizing money from loan to make money:
- Investment in Land
Land is always considered as one of the kind of investment through which there are chances of doubling the investment in few years. Getting the right land with clear legal documentation is essential for this type of investment. All you need to do is take a loan with best offers and low interest rates to invest the money in a property. Once this is done, it is left up to the individual to whether wait for a long period to give sufficient type for the land value to grow twice or thrice the actual price or re-sell it once you have made sufficient profit to close the loan and still have some savings.
As a piece of advice it is good to invest in a property and wait at least for 6-8 years to get a real good return on investment. This type of investment can be considered as making money from money.
- Investment in Housing and Building will Generate constant Revenue
Unlike investing in land, the mechanism of investing on house or commercial building is different. Investment in house will not just generate profit and appreciation in the property value but will also help in tax exemptions. This type of investment will generate regular income by way of renting the residential or commercial property which will help in getting tax exemptions.
The benefits are higher through investment on residential and commercial property. Thus it is advisable make use of the money taken from loan for these type of purposes to make sure the investment is always valued and the debt is generating profit.
- Investment in Precious Metals
While all are focusing on land and such other big investment, it is also important to understand the fact that it is not affordable by everyone. This is where the benefit of precious metals can be made use. Investing in gold, diamond, pearl and other similar costly metals has turned out to be the trend of making sure even the little money with you is not spent on unnecessary things.
Taking small loan amount that are affordable to repay can be made use to buy such precious metals and over the period of time the resale value of these metals will shoot up. However if you are looking to make profits or return s within a period of one to two years, then this investment is not advisable at all. Gold and similar precious metals will generate visible profits only over the period of 5- 6 years. However, the same can be used as ornaments during this period instead of having it as dead investments.
- Investment in Venture Capital that will Generate Periodic Returns
In India one of the biggest opportunities for those who are looking to invest a decent amount to generate maximum profits is by investing in venture capital firms. These firms will make use of your money to fund startups, small and big businesses to generate maximum returns. This return will be shared with the investors according to the ratio of each individual’s investment. Though these do not enjoy any tax exemptions the return on such investment is considered very high and beneficial.
Benefits of Making Money from Loans
- Expenses will be controlled to make money for the repay of loan taken on investment
- While debts are being cleared on one side, the flip side money will grow through the investment made
- Can strike a balance between inflation and market growth
- Can get help of rental income
- Those who cannot save can make use of this enforced savings programme
Those people who find it really difficult to save money from their income for investment should try this method of savings. This will help in having investment on one side and on the flip side you will be able to clear the debt with your monthly income.