Three Ways to Generate Extra Income in Today’s World

If you want to get the source of extra income then you must definitely invest in liquid or accrual Funds. Large numbers of people work hard to earn money for the family and the self. But, there are few people who know how to make their money by not working hard. They believe in few options which people could use to earn some extra income. You can simply put a small part of your hard earned money into Liquid Funds or in accrual funds. By investing in these funds, retired people also get aided in earning some extra income.

What Are Liquid Funds And Accrual Funds?

The mutual fund schemes those are ideal for putting money for a very short period of time is called Liquid Fund.  The time period is preferably not more than three months. As these funds invest in extremely short-term Debt papers, so they come with very low volatility and risks.

On the other hand, funds those invest in Debt papers of short and medium tenures to generate interest income are called accrual funds. Such funds usually do not take any interest rate/credit risk but stick to earning interest.

Investing In Accrual Funds

As per the financial planners and advisors, retired people could invest in Debt accrual funds for higher post-tax income. Such funds are more useful to those retired people who are in the higher income tax bracket. People who are in the 10% tax bracket, bank fixed deposits are also beneficial. Thus, in this way, people who are in the 20% and 30% tax bracket can generate another stream of income by investing in accrual funds. All the investors can invest in the fund and subsequently should also set up a systematic withdrawal plan. The systematic withdrawal plan will be set up in such a way that only the gains from the fund are transferred to the investor’s bank account. This is transferred at regular intervals. In this scheme, the principal remains untouched.

Investing In Liquid Funds

While making an investment in Liquid Funds, you could generate annual returns of nearly 7%. Liquid Funds are almost a perfect substitute product for SB accounts. It could turn more attractive in terms of return.

Another way of getting the source of income is by investing in stock market. One of the golden rules to invest in the market is to be prepared for bearing loses. Apart from this, it is advised to pick a superior stock, if you are operating in an uptrending general market. Remember that the potential winners will have strong earnings and sales growth, increasing profit margins and high return on equity. Such investors should always be in a leading industry group.

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