After dabbling in traditional investment avenues like stocks, fixed deposits, gold, mutual funds and real estate, some investors are venturing into more adventurous territorydigital currency, crowdfunding and P2P fundingto make their wealth grow.
While the returns have been satisfactory in many cases, others have lost money too. We look at the pros and cons of some alternative investing avenues.
Bit by bit There are a little over 15 million bitcoins in circulation today and no more than 21 million will be mined ever, making the virtual currency attractive to investors. The rising demand for and lack of supply of have pushed up the price of bitcoins from $16 per coin in 2013 to $1,700 today.
Sensing the potential of bitcoins as an investment, Bengaluru-based Ashrith Govind, 23, started investing Rs 5,000 a month in the cryptocurrency three years ago. Encouraged by the returns30% annually he is now investing Rs 30,000 a month.
Ashrith Govind, 23, Bengaluru His alternative investment: Started investing Rs 5,000 a month in bitcoins in 2014. Now invests up to Rs 30,000 a month.
However, an investor in bitcoins has to be ready to face extreme volatility. In 2015, Govind lost Rs 1.5 lakh when price of bitcoins dropped significantly. One bad trading day can mean a loss of Rs 12,000 for him.
Sathvik Vishwanath, CEO and Co-Founder of online platform Unocoin says, There is a financial risk in investing in bitcoins. Like in equity markets, investors tend to buy when prices are up and sell at lows. Then there is a technology risk too which can render bitcoins virtually worthless in future.
More importantly, the legality of bitcoins is in question in India. Warning against the use of bitcoins, Minister of State for Finance Arjun Ram Meghwal stated in Parliament that, The absence of counter parties in usage of virtual currencies including bitcoins, for illicit and illegal activities in anonymous/pseudonymous systems could subject users to unintentional breaches of anti-money laundering and combating financing of terrorism laws.
Financial advisers feel bitcoins as an asset class should ideally be avoided. Shree Parthasarathy, Partner, Deloitte Touche Tohmatsu India warns, The money invested in bitcoins, if at all, should form an insignificant part of your portfolio and you should be able to afford to lose all that money.
Lend and earn P2P platforms have brought lenders and borrowers closer. Technology allows easy credit to borrowers, while lenders earn high returns on idle funds. Chennai-based Jose Joseph, 45, has been lending on P2P platforms since 2015. On the Rs 1 lakh he has put in so far, he has earned an average return of 20%.
Jose Joseph, 45, Chennai His alternative investment: Started lending money on P2P platforms in 2015. Has invested Rs 1 lakh so far.
However, before lending you should study the borrowers profile carefully to compute the risks before making a lending decision. Rajat Gandhi, CEO and Founder of P2P lending firm, Faircent, says, Most P2P platforms provide details about borrowers. They are classified across risk buckets from low to very high and selection should depend on your expectations.
The biggest risk is that of defaults and P2P platforms not helping in collections. So, before you lend money ask about the platforms collection assistance policy.
As Bhavin Patel, CEO of P2P lending firm LenDen-Club says, P2P lending is still at its nascent stage. Its unclear what will happen to a P2P loan during a major downturn. Lenders need to be careful when the economy is slowing down.
Going with the crowd Crowdfunding has also found favour among those looking to invest in the startup space. Gurgaon-based Sandeep Aggarwal has invested in nine startups till now this way. Aggarwal says, I make it a point to understand the market and longevity of products and services the company is going to offer. I prefer to interact with the founders and core management team for better insights.
This mode of investing works best for those with a long time horizon of at least 5 years as probability of losses is high in the initial 2-3 years.
Sandeep Aggarwal, 44, Gurgaon His alternative investment: Has been investing in startups through crowdfunding since 2015. Has invested in nine startups so far.
Chaitanya V. Cotha, serial entrepreneur and investor cautions, Such investment comes with a lot of terms and investors own a very small stake. There are no rights for the investor and you dont really have a voice in decision making made by management.
According to Apoorv Ranjan Sharma, Cofounder and President, Venture Catalysts, the common risk in investing through crowdfunding is the herd mentality among investors. The other risk is the product not seeing the light of the day because of operational challenges. Chances of fraud are also high. As Cotha says, Many so-called start-ups are in the market looking for a quick buck.
Read the original here:
Should you invest in Bitcoins, crowd funding, P2P lending? - Economic Times
- Crowd Funding Size, Growth, Analysis Of Key- players Types And Application, Outlook 2025 - 101Newsindustry - December 7th, 2019
- Parents of Beatriz Farmer-Maia raise over 30000 to fund her treatment to beat childhood cancer - Islington Gazette - November 19th, 2019
- How to Crowdfund (with Pictures) - wikiHow - June 7th, 2018
- Property Crowd Funding - The Magic of Modern Day Investing - HuffPost - September 4th, 2017
- Getting Crowdfunding Fundamentals Down to A Science In Advance Of Campaign Key To Success - HuffPost - August 28th, 2017
- Dreamhost Crowd-Funding Legal Action Against DOJ - eWeek - August 22nd, 2017
- Buy a share in a brewery: Pozible launches equity crowd-funding site Birchal - The Sydney Morning Herald - August 1st, 2017
- Woman who contracted E.Coli returns home from Turkey after crowd funding appeal - Glasgow Live - July 9th, 2017
- Africa's first impact-focused equity crowd funding portal founder ... - CNBCAfrica.com - July 5th, 2017
- Crowd funding campaign to save a two-year-old kid - Times of India - July 2nd, 2017
- Arrowtown musician Holly Arrowsmith crowd funding new album - The Southland Times - June 26th, 2017
- Ex-Googler Lina Gantar launches crowd funding agency in Manchester - Manchester Evening News - June 25th, 2017
- Crowd funding could be used to buy the long-vacant Bell Building downtown - Wyoming Tribune - June 24th, 2017
- Wyo. Sec of State unveils new crowdfunding platform - Wyoming Business Report - June 16th, 2017
- Wyo. Sect'y of State unveils new crowdfunding platform - Wyoming Business Report - June 14th, 2017
- Where is the crowd-funding for the destitute? - News24 - June 9th, 2017
- Florida education news: #HB7069, teacher diversity, crowd funding and more - Tampabay.com (blog) - June 5th, 2017
- BBB Has Advice Before You Contribute To A Crowd Funding Site - Newstalkkgvo - June 2nd, 2017
- Catapooolt all set to Catapult Crowdfunding in India with an Asian Record - Bizztor (press release) (blog) - May 19th, 2017
- Cork Foundation's Live Crowd Funding event - The Avondhu Press (press release) - May 6th, 2017
- Will crowdfunding get a synthetic biology win? - PLoS Blogs (blog) - May 3rd, 2017
- Impact Guru, GlobalGiving tie-up to scale crowd funding in India - Daily News & Analysis - May 2nd, 2017
- Plastc Card Is Cancelled: The Dangers Of Crowd Funding Tech - Forbes - April 29th, 2017
- Can crowd funding help scale up solar power for Africa's poor? - The Standard (press release) - April 25th, 2017
- Donate safely: Avoiding crowd funding scams - KXLY Spokane - April 20th, 2017
- Maharashtra schools raise Rs 216 crore via crowd funding - The Indian Express - April 18th, 2017
- Crowdfunding: affordable bee surveillance for hive health - Scoop.co.nz (press release) - March 29th, 2017
- Crowd funding: SECP warns of false scheme - The Express Tribune - March 28th, 2017
- Arsenal fan plots sensational crowdfunding campaign to BUY the club from owner Stan Kroenke - The Sun - March 23rd, 2017
- How to make crowdfunding work for you - Buffalo Business First - February 13th, 2017
- Crowd funding | ASIC's MoneySmart - September 17th, 2016
- Crowd Funding - October 23rd, 2015
- Crowdfunding - P2P Foundation - October 23rd, 2015
- Comparison of crowdfunding services - Wikipedia, the free ... - September 5th, 2015
- Fundraising Script,Crowd Funding Script,Crowdfunding ... - August 14th, 2015
- The Life Chest: Crowd Funding Video - Video - May 5th, 2015
- THIS TOKYO #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS LOVE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS PSYCHIC #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS SUPER #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS ROADHOUSE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS BEYOND #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS HEARTBREAKER #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS WWW #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS GENUINE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- True Colours Crowd funding Campaign - Video - May 4th, 2015
- THIS NEW YORK 2015 #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- Armitage Dinosaur - crowd-funding video - Video - May 3rd, 2015
- Who benefits from crowd funding? - Video - May 3rd, 2015
- The Man Who Found His Freedom - Video - May 3rd, 2015
- Crowd Funding proof V1 - Video - May 3rd, 2015
- TEN FOOT TONE - New CD - TASTE GOOD - Video - May 3rd, 2015
- One Spark/Tamarin Fruits - Video - May 1st, 2015
- Crowd Funding Video- BROKEN ROAD (Short Film) - Video - April 30th, 2015
- Crowd Funding video San Jose Bike Clinic - Video - April 28th, 2015
- Domestic Violence & Abuse Help Break the Cycle - Seed the Books Crowd Funding Campaign - Video - April 28th, 2015
- LEARN IT | BUILD IT | MANAGE IT: FINANCING - Crowd Funding - Video - April 27th, 2015
- Crowd Funding- Habitat for Humanity Charity Trip to Cebu in June 2015 - Video - April 27th, 2015
- Annalakshmi on the swan Crowd funding 14 04 15 WM - Video - April 26th, 2015
- Beat Buddy Inside Story - Video - April 26th, 2015
- Engineers Corset Crowd Funding Video - Video - April 26th, 2015
- "Welcome to the Shop" -HPER Team Crowd Funding Campaign - Video - April 24th, 2015
- Toms Crowd Funding 32 SD 480p Copy - Video - April 24th, 2015
- Blake Lodge Centre, Plymouth Deaf Association - Crowd Funding - Video - April 24th, 2015
- Copy of Heart Vs. Head Crowd Funding Campaign-Final Request - Video - April 24th, 2015
- April 2015: Help Wall St for Main St Crowd Fund! - Video - April 24th, 2015
- Climate for Change Crowd funding video - Video - April 24th, 2015
- Sacred Foundations, Inc. Crowd Funding Intro - Video - April 23rd, 2015
- Specialty Beer - Video - April 23rd, 2015
- Crowd Funding Take 4 18 15 - Video - April 23rd, 2015
- Baby Got Wings / I Like Big Bugs - Video - April 23rd, 2015
- Evolution of Color in Australian Frogs Crowd Funding - Video - April 23rd, 2015
- Creative Lab Curaao over crowd funding actie Revive Gomezplein - Video - April 23rd, 2015
- My TubeStart update! - Video - April 23rd, 2015
- Alphaworks Equity Crowd Funding Platform Rebrands To Quire - Video - April 23rd, 2015
- Community Crowd Funding - Video - April 21st, 2015
- TOP Foundation Crowd Funding Video - Video - April 21st, 2015
- HIR 3 - crowd funding campaign on TravelStarter - Video - April 21st, 2015
- Get us to the World body painting festival - Video - April 21st, 2015
- BluSticks Crowd Funding Video (ENT 4113 - Group 6) - Video - April 21st, 2015