Business Ideas of a middle class person investing in business?

Business Ideas of a middle class person investing in business?

Business Ideas of a middle class person investing in business?

Financial planning is often perceived as something that only the wealthy people should do. That is, understandable. The larger your income, the more complex your finances are. But, people who don’t have huge amounts of savings need guidance too. Even if you can’t afford to keep financial advisors, still you need to invest in order to save for the rainy day.  People who save regularly and then invest wisely can collect a significant fortune over time; something that they can then rely on to help them through their sunset years. The question is, where can a middle class person invest in a business. The following are the business ideas of an average salaried person for investing in buiness.

Mutual Funds

“Where to invest, depends upon the amount of investment that one can make and the risk appetite one has. Right now, the best and safest option would be to invest in mutual funds. Mutual funds are like an investment company. They have diverse portfolio of investments they use your money to make investment on your behalf and then you get the share of profits according to the size of your investment. There are few mutual funds that invest in Islamic products like Sukuks, which are Islamic bonds. You get profit share, but not interest,” says Babar Shah who works in a bank.

For individual investors, mutual funds provide numerous benefits: access to professional investment management, diversification of funds in various asset classes, ability to invest with meager amount and transparency due to role of regulator and trustee.


The second option one has is to buy gold. Collect money and invest in gold. When the market is down for gold, make an investment in gold and you can turn it into cash when the gold prices are high.

Informal Committees

For middle class people, the best option is to have a group of people contribute some money and form a committee. It is a system of having access to interest free loans.

The process is such that a group of people contribute money to an agreed set of people for a month. Then, a draw takes place monthly and one lucky member of the group receives a fixed amount of money which is equal to the common pool of contributions made. The person, who wins, then ceases to contribute further amounts for the period of the committee; other members of the group continue until their names are drawn out; the committee is then drawn to a close when all members of the group have received a fixed amount. This is an interesting arrangement, as no one in the group suffers a total loss of the capital contributed by them.

Shares in Stocks

The fourth option one has is that one can buy stocks. But one has to invest in different stocks. Buying just a few shares of four stocks give you more money than if you put all your money in one stock. The reason being – that may be if one of your stock gets a gain of only 5% while another one just doubles up. So you never know which stock will give you more profit. Past performance of a stock is a rotten predictor of the future results. Never get discouraged by a market slump and change your long term investment plan.

It is also important to know how much risk you are willing to undertake. Ask yourself, “Will I just have a nervous breakdown if my investments drop in value by 10%? If you are going to get doomed with a little dip or you are not much of a risk taker then you need to invest more in bonds, in utilities and in value stocks.

Don’t forget to reinvest the interest and dividends from your stocks and bonds. Also, in investing, you’re not going to be right every time. You’re not going to always be able to buy low and sell high. But remember, that the objective is not proving yourself right every time, but it means sticking to your original plan of investment, investing in good-quality, profitable companies, and putting more money into the market on a regular basis.

Also read: Top 10 Small Business Investment Opportunities in Pakistan

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Is beneficial to invest in prize bonds