Some of the Best Investment Options for Non-Salaried People

Being self-employed can have its own share of benefits. You don’t have to answer to a boss, nor do you have to worry about meeting any targets other than your own. However, the downside of being self-employed is that you cannot always guarantee your monthly income. Those who work in salaried jobs know that they will get a specific amount at the end of each month, which allows them to create their budget accordingly. But when you’re self-employed, your income can drastically vary from month to month.  

This makes it harder to create a standardised budget. Moreover, this varied income can also make it harder to invest in wealth growth instruments. Self-employed individuals already deal with the risk of unstable income, and the added risk of market-linked investments can be too much for some. But that does not mean that self-employed workers should forgo investments completely!  

There are several investment options to choose from, and some of them even offer returns that are completely guaranteed. Here are some investment options that might be ideal for non-salaried people who want a low-risk alternative to market-linked equities.  

Mutal Funds 

Mutal funds are financial products that mitigate market risks by pooling money from multiple investors. In a mutual fund, you do not purchase stocks or bonds individually. Instead, your money is pooled alongside other investors to purchase various financial assets. This pooling of funds ensures that all risks are shared among investors in the event of a market drop. Mutual funds offer decent returns while reducing your overall exposure to risk. However, it should be noted that mutual fund returns are usually not as high as direct equity investments.   

Unit-Linked Insurance Plans 

Unit-Linked Insurance Plans (ULIPs) are a new age insurance product that combine the benefits of life insurance with market-linked funds. The premiums you pay towards a ULIP will not only pay for your life cover but will also be invested into various market-linked funds. With a ULIP, you can ensure your family’s financial security while also passively growing your wealth over a period of time. Moreover, ULIPs are highly flexible and allow you to switch funds between equity and debt securities. This flexibility allows you to manage your risk level as per your current financial goals.  

Edelweiss Life- Wealth Plus is a ULIP that offers unlimited fund switches and a choice of seven diverse funds. Moreover, this plan also provides additional allocations every single policy year.  

Public Provident Funds 

Public Provident Funds (PPFs) are government backed investments that allow you to save money with minimal risk. Since PPFs are government linked, you can rest assured that you will get your returns without any issues. Moreover, returns in PPFs are completely guaranteed. The government sets a new rate of interest every financial quarter, and this rate remains unchanged till the next quarter. Plus, PPFs have a fixed tenure and allow you to partially withdraw your funds during emergencies.  

Guaranteed Income Plans 

Life insurance plans can not only protect your family’s future but can also grow your savings for your life goals. While ULIPs are market-linked and hence have an element of risk, guaranteed income life insurance plans offer a fixed rate of returns that never changes. Say for example that you get a guaranteed income plan with an interest rate of 5%. This 5% interest rate will remain constant throughout your policy term, even if that term lasts for a decade or longer. This means that you can calculate the returns you will get from day one of your policy! Guaranteed income plans are a great way to passively grow your wealth without the risk associated with market-linked stocks.   

Edelweiss Life- Premium Guaranteed STAR is a guaranteed income plan that offers life cover, loan options, and the flexibility to customize your policy duration. Plus, under this plan, your guaranteed income will grow by 5% every 5 policy years.  

Fixed Deposits 

Fixed deposits are special savings accounts offered by most banks in India. Fixed deposits (FDs) offer a higher rate of interest when compared to a normal savings account. However, the downside of fixed deposits is that you cannot withdraw your money from the account until the very end of the tenure.  

National Pension Scheme 

Retirement planning is a core goal for every Indian citizen, whether they are salaried or not. This is why the Government of India has their own National Pension Scheme (NPS). This scheme is a long-term investment that is ideal for anyone who wants to create a sizable retirement corpus. NPS is market-linked, so your funds will grow in accordance with market rates. However, similar to ULIPs and mutual funds, the risk is diversified among a pool of investors. NPS also lets you make partial withdrawals after 3 years, and you can even prematurely withdraw all your funds after 5 years.  

Conclusion 

Having an unstable income need not be a barrier to investment! There are numerous investment options that are ideal for self-employed people. Your primary goal, whether you are salaried or self-employed, should always be to secure your financial growth for long-term success. If you are uncomfortable with any amount of risk, consider getting a guaranteed income plan or investing in PPFs. But if you want a greater return on investment while still mitigating risks, consider investing in mutual funds, ULIPs, or the National Pension Scheme.