You have ₹1,00,000. Instead of leaving it in a fixed deposit earning 6% annually, you explore a short term personal loan platform offering returns of 12% per annum. Let’s calculate.
- Fixed deposit for one year: ₹1,00,000 x (1 + 0.06) = ₹1,06,000.
- Short term personal loan investment: ₹1,00,000 x (1 + 0.12) = ₹1,12,000.
That’s ₹6,000 extra! It’s tempting, right? With alternative investments like short term personal loans and others, you can potentially grow your wealth faster. Alternatives are projected to account for 20% of India’s total assets under management by 2026.
Let’s explore these exciting options.
What Are Alternative Investments?
Let’s say you’re already investing in stocks and bonds. What happens when the stock market dips? Your portfolio value drops. Alternative investments come in here.
These are non-traditional assets like real estate, short term personal loans, or commodities. They work differently from stocks, reducing your risk. They diversify your portfolio and add stability.
Ask yourself: What happens if gold prices rise while the market crashes? Your gold investments cushion your losses. This is why alternatives matter.
Top Alternative Investment Options
1. Real Estate
You’ve heard of buying property for rental income. But what about REITs? With as little as ₹10,000, you can invest in real estate through REITs. If a REIT offers 8% annual returns, investing ₹50,000 could earn you ₹4,000 annually.
2. Commodities
Gold and silver are popular choices. For instance, if gold prices rise from ₹55,000 to ₹60,000 per 10 grams, a 10-gram investment nets you ₹5,000 profit. It’s a hedge during inflation.
3. Peer-to-Peer Lending (P2P)
P2P platforms let you lend money to borrowers for short-term needs, like short term personal loans. These loans offer 10–15% returns. For example, lending ₹1,00,000 at 12% interest earns you ₹12,000 annually.
Comparison Table: Alternative Investment Returns
| Investment Type | Minimum Investment (₹) | Average Returns (%) | Risk Level | Liquidity |
| Real Estate | 10,000 | 8-12 | Medium | Low |
| Gold | 5,000 | 5-8 | Low | High |
| P2P Lending | 5,000 | 10-15 | High | Medium |
| Cryptocurrencies | 1,000 | 20-50 | Very High | High |
| Art and Collectibles | 50,000 | 7-10 | Medium | Low |
Data and percentages provided are for illustrative purposes only and may vary.
How to Start Investing in Alternative Options
Alternative investments need planning. Start with small amounts. For example:
- Begin with ₹10,000 in P2P lending platforms.
- Add ₹20,000 to a gold ETF.
- Invest ₹5,000 monthly in REITs.
Checklist before investing:
- Research platforms and their track records.
- Check fees and returns.
- Align investments with your financial goals.
Risks to Consider
Every investment has risks. Alternative investments are no different.
- Illiquidity: Selling real estate or art takes time.
- Default Risk: In P2P lending, borrowers might not repay.
- Market Fluctuations: Gold and crypto prices can be volatile.
To minimise risks, diversify. Don’t put all your money into one option.
Conclusion
Alternative investments aren’t just exciting—they’re essential for a balanced portfolio. Whether it’s real estate, gold, or short term personal loans, the choices are vast.
Here’s a question for you: How can your current investments better align with your financial goals? Start exploring alternatives today. Your future self will thank you.
FAQs
- What is the best alternative investment for beginners in India?
Start with gold ETFs or P2P lending. They’re simple and require small amounts. - Can I lose money in P2P lending?
Yes, if borrowers default. Choose platforms with strong borrower checks. - How much should I invest in alternative assets?
Allocate 10–20% of your portfolio, depending on your risk tolerance. - Are alternative investments regulated in India?
Yes, platforms like REITs and P2P lending are SEBI-regulated.
