After my last article, it became apparent to Handa Uncle that it was I who had dropped soan papdi not his 1-year old grandson as blamed earlier. To apologize, I went to their house and took a Gangnam Style Robot for the little one.
At his house, I met Tikli (Tick-Lee) Seth, a friend of his from Bangalore in town for his brother in law’s marriage. A pot-bellied, chubby faced, shrewd vyapari (trader), Tikli Seth would give Bappi da complex with his ornamental collection. He has a mansion at the outskirts of Bangalore at Karnataka & Tamil Nadu border and trades in crackers. He makes a fortune every Diwali and this year was no different. With all the tussle between ban and supporters of crackers, his profits soared. His earning season is only for a month, but it takes care of him for next 11 months. His business has all the ingredients of Buffet’s favourite business See’s Candy that gave Buffett 8000% return.
Do you know you can lend money to growing companies and earn fixed returns? It’s done through products called corporate bonds and the best part? Returns range from 8 – 20%!
Both gentlemen were animatedly discussing about the avenues where Tikli Seth should invest his largesse. He wanted to invest in an opportunity that would give him regular monthly returns in absence of any other income source. At least 1/3rd of his capital should be back in next 10 months enabling him to place order for the next Diwali. He wanted predictable returns without vagaries of the market.
Handa Uncle (turning towards me): Beta, any suggestions?
Me: How about Corporate Bonds? Some of them offer 10% & are quite safe
Tikli Seth: “Itni ki Daawat naa hogi jitney ka Shagun dena pad jayega!” (He meant “Tax would eat away all the returns”)
Handa Uncle: Why not buy a flat and give it on rent for monthly income?
Motiaini Seth: “Bahut kicchh kicchh hai… rangai, putai, vasooli, rakh rakhav…athanni chawaani ke liye kaun itna maatha pacchi kaun karaga…” (“Return on efforts is very low”)
Handa Uncle: That’s true.
Tikli Seth: “Kuch aur badhiya scheme ho to batao?” (“Any other investment opportunity?”)
Me: How about you invest in cars and earn rental on them, but without kicchh kicchh (hassle) of buying maintaining and running the cars?
Before Tikli Seth could come up with another aphorism, I continued.
Me: altGraaf is bringing a new leasing opportunity wherein you can invest in cars & rent them to earn ~12% post tax.
Tikli Seth: Pudding ke naam par gobbar ke oopar cherry to laga ke to nahi bech rahe? (“You ain’t selling me crappy equity in the name of fixed high returns, are you?”)
Me: No, not at all. The beauty of leasing transaction is that it is akin to fixed income product but with equity like return. I will send you all the product details. Let’s discuss when you have gone through them
I had to leave as Uber taxi was waiting for me. While returning, I could not help but wonder about the lack of awareness about alternative investment products even amongst the affluent class. It dawned on me that it’s going to be a tough ride ahead.
Next moment, I thought “Jab Okhli mein sar diya toh phir muslon se kya darr?”
To explore the world of high-yield fixed income investment opportunities, visit here.
