Investment is the act of accumulating capital or wealth to make a profit or maintain its value. For example, you buy an apartment now at the current price and sell it 5 years later at a higher price. Profitable investments are possible not only with large capital but also with small capital.
You can invest with capital from IDR 100,000, for example, to buy 1 lot (1 lot = 100 shares) of shares. So you can try profitable investments with a capital of 10 million or even less.
Before you start investing, you need to know the 3 types of investor risk profiles, namely:
Conservative: Lowest risk profile and more on the safe side. Low doesn’t matter as long as it’s safe
A risk profile willing to take big risks but cautious and smart to limit the number of investments in risky instruments
Aggressive: This is a risk profile where investors are willing to accept large profits and losses with large capital placements
If you know your risk profile, it will be easier for you to determine the investment vehicle that is right for you. Set aside part of your income for health insurance. Here are some types of profitable small and large capital investments in 2020 that you can try.
The first profitable investment, there is real estate which continues to rise every year except when the economy is sluggish or in a recession. An example of a real estate investment might be a home that you turn into a guest house, especially if you maximize it with a laundry or catering business.
Real estate, the real sector in developing countries, doesn’t have much impact on inflation as it’s more of an expectation. In other words, real assets can protect finances from inflation. Real estate is indeed a profitable quick investment, only the capital required is quite large.
Gold or precious metals is still one of the most popular choices for the people of Indonesia as it is an asset that is easy to sell or non-cash. It’s just that investing in gold comes with risks, especially if you own large amounts of bullion. Therefore, a locker fee applies for storage.
Gold prices have been trending higher lately during this COVID-19 pandemic. So it goes without saying that gold will be called a profitable investment in 2020. In addition, gold is a profitable investment for the future due to its long-term nature. Are you interested in trying a profitable investment with this small capital?
Investing in mutual funds is for those of you who don’t want to mess with complicated charts. You simply entrust the money to the investment manager and then all you have to do is collect the profits. There are four types of mutual funds namely money market mutual funds, fixed income mutual funds, equity mutual funds, and mixed mutual funds. The distribution depends on the purpose for which the customer’s money is invested and the risk profile.
If you want to invest in the short term, you can opt for money market funds. 100% of assets are invested in short-term instruments such as Bank Indonesia Certificates (SBI) and bonds. This mutual fund investment is suitable if you have a conservative or moderate risk profile.
If you want a long-term investment, you can opt for stock mutual funds. Up to 80% of the equity fund’s assets are invested in the company’s equity instruments. This investment risk is relatively high and therefore suitable for those of you who have an aggressive risk profile.
The next profitable investment stocks. Equities are among the capital market products and are classified as long-term investment products. There are two main benefits of investing in stocks, namely:
Dividends are profits distributed by a corporation or Tbk to investors or shareholders
Capital gain is the gain on the difference between the selling price and the buying price of a stock
As a profitable investment in the future, stocks also carry some risks, such as:
A capital loss is a loss from the difference between the selling price and the buying price of a stock, the opposite of capital gains
Liquidity risk is a condition when a public company is declared bankrupt by the court and then dissolved and its assets sold to pay all liabilities. If there is a remainder, the shareholders are entitled to the remainder of the sale.
Bonds or debt securities are investment vehicles that can be traded on the secondary market of the Indonesian Stock Exchange (IDX). Bonds listed on the Indonesia Stock Exchange (IDX) include:
Corporate bonds: from BUMN, BUMD, and national private companies
Sukuk: Sharia securities, usually in the form of State Sharia Securities (SBSN). According to Islam, this option is the best investment option
Government Securities (SBN): Securities consisting of State Sharia Securities (SBSN) and Government Securities (SUN)
Asset-Backed Securities (EBA): Securities containing debt instruments that use underlying assets as a basis for issuance
You get several benefits by making bonds the best investment choice in 2020:
Gains on capital gains from the sale of bonds in the secondary market
Relatively lower risk compared to other instruments such as stocks
There is a wide range of series on the secondary market
Providing odds/coupons/fees/regularly which average value is above the interest on deposit
Peer-to-peer lending (P2P lending)
Looking for the most profitable short-term investment? You can invest in P2P lending because it has a bigger and safer rate of return or return. P2P lending is one of the attractive online investment offerings with the rise of fintech companies. But the risk is also quite high.
Peer-to-peer lending has the concept of providing credit and offering investment by bringing lenders and borrowers together. If you act as a lender, the average return or return on P2P lending is more than 10 percent per year. Are you interested in trying out this most profitable short-term investment?
Deposits are one of the profitable investments in banks, suitable for those of you who want to get great interest on deposits. The average interest rate on deposits is 5 percent per year and receiving a guarantee from the Deposit Insurance Corporation (LPS) is one of the benefits of deposits.
You must know that deposits can only be made within the time frame agreed between the customer and the bank. For example per 1 month, 3 months, 6 months, 12 months, up to 24 months. Get ready for a fine if you accept deposits before their due date. Additionally, the return on deposits is relatively low compared to bonds, stocks, and mutual funds. Interested in trying this profitable investment example for beginners?
Exchange Traded Funds (ETFs)
Exchange Traded Fund (ETF) is one of the financial instruments in the stock market. The investment takes place in the form of a collective agreement and the investment shares are listed and traded on the stock exchange. A stock fund contains a portfolio of stocks a, stocks b, etc., while an ETF contains an index such as the JSX LQ45 Index Fund (R-45 ETF).
The way this profitable investment for the future works is (1) trading: ETFs are exchange-traded while mutual funds are non-exchange traded; (2) Minimum Investment: There is no ETF while mutual funds apply as per the prospectus and/or fund fact sheet.
The following are the benefits of exchange-traded fund investing:
Portfolio diversification. For example, if an investor buys the LQ 45 Index ETF, they automatically have a portfolio of 45 stocks
Relatively liquid as ETFs are traded on exchanges
Dividend gain if the ETF product pays dividends
Futures savings is one of the profitable investments for beginners or people who are just starting to invest. This profitable future investment earns higher interest than ordinary savings. The interest margin is around 3 to 4 percent per year, still below the deposit rate, which averages 5 percent per year or more.
The minimal risk of runtime savings makes it a viable investment for the future. So you don’t have to worry about suffering losses, such as in share investments, the prices per share rise and fall. Lest you are prying, just try a profitable investment in this bank.
Equity crowdfunding is relatively new in Indonesia and will become one of the most profitable forms of investment in 2020. The principle of this investment is in the form of a fundraising program for entrepreneurial venture capital by several people together or in general. a joint venture.
Equity crowdfunding has a scheme that makes it easy for potential business people to find funding sources. There are three parties involved in this scheme, namely the platform provider, the project owner aka the capital requirement partner, and the investor as a financier. In equity crowdfunding, the number of investors funding a specific company cannot exceed 300 companies. The investor takes a stake in the capitalized company.
This type of investment also harbors risks, namely if the funded project fails. Therefore, investors need to be careful when choosing the project or party to fund and when choosing the equity crowdfunding platform.
The second most profitable short-term investment is Forex, which stands for Foreign Exchange. That is the exchange rate between one currency and another currency. Trading is the trading of financial products (forex is currencies) based on market prices when the transaction takes place. Forex value can change at any time according to the dynamics of the market, making it a trading arena.
Forex trading can be an example of a high-risk investment. You need to take several mitigation actions, namely:
Diversify by investing funds in different investment vehicles, don’t put everything in forex
Money management is a set of risk management techniques in forex trading
Assess whether your risk profile matches the high risk and high reward of forex trading. For example, if you are retired, you may not be qualified to play this instrument
Are you interested in trying out this profitable investment?
Although mutual funds have an investment manager, sometimes we still get confused about the many types of mutual funds or how to choose one of the many mutual fund companies. One of the breakthroughs to overcome this is Robo Advisor. Robo Advisor makes mutual fund recommendations based on your investment profile.
When used, Robo Advisor will ask you to fill in some data to create your investment profile. It is a useful basis for recommendations. Beginning investors certainly have different mutual fund recommendations than middle-aged investors with families.
Unit Link combines insurance products with an investment component where part of the insurance premium is invested in the chosen investment vehicle. This investment also comes with risks and you should be aware of the following risks:
The first risk is that the cash balance in insurance companies will fluctuate depending on the success of the investment. Although it is an insurance product, the value of your money is determined by your return. If the chosen investment vehicle is stocks (previously chosen in the proposal because of the exceptional prospects), the stock price will fluctuate on the stock exchange, thereby reducing the value of your money in unity link sway.
Second, not all funds you pay are invested, even insurance payments take precedence over investments. The priority in allocating unit-linked funds is insurance costs first, then investments
Third, the Unit-Link management fee is quite high compared to mutual fund investments. With the level of discounted fees, the funds that can be invested are less
What you need to be aware of in this quick return on investment is a risk. Learn if unit linking is effective in achieving your financial goals.
Art and Collectibles
Art objects and collectibles can also be an investment in the future. Call it the painting Lost on the Grand Banks by Winslow Homer, which Bill Gates bought for $30 million in 1998.
Another example is collecting Lego, which is one of the toys with a high price due to its limited number. The Lego Star Wars plane retails for $15,000 and the price is set to continue to rise as more collectors seek it. Do you have collectibles as a profitable investment?
Bitcoin is an electronic currency created in 2009 by someone going by the pseudonym Satoshi Nakamoto. One of these cryptocurrency variants has become a popular online investment due to its lucrative profits and exceptional appreciation in value from time to time.
Many people believe that this new investment vehicle has the potential to maximize profits. In Indonesia, there are quite a lot of bitcoin users and even several companies have been established specifically to become bitcoin trading (transaction) platforms.
Profitable investment tips for the future
After knowing the different types of profitable investments with small or large capital, you also need to know how to implement the right investment strategy. Curious? Here are tips for profitable investments in the future:
Now investing is not as difficult as it used to be because there are more and more variants to choose from. It’s never too late to invest. First, you can determine what your investment goals are. Then choose an investment product that suits your investment goals and risk profile. Starting with bonds, stocks, mutual funds, precious metals, and deposits.
Choose investments that can fight inflation
Inflation causes all basic needs to increase. The current value of IDR 1,000,000 is certainly different in 2025. According to the Central Statistics Agency (BPS), average inflation in Indonesia has reached 3.16% over the past 5 years. Inflation is forecast to increase by 3% to 5% each year.
So you can’t fight inflation by saving at a bank where interest rates are relatively low, in the range of just 2% to 3%. Not to mention discounts on bank management fees and other costs. You can invest in stocks and mutual funds because they have returns or gains that are higher than inflation.
Diversification divides the capital you have into multiple assets. To maximize investment returns, you can diversify when investing. The goal is to prevent catastrophic failure when an asset suffers a loss while you still have other assets. The most common example of investment diversification is multiple investment products such as deposits, stocks, gold, mutual funds, and others.
Choose the right investment
There are different types of investments that you can choose from, starting from investing in the capital market, namely stocks, bonds, mutual funds, and Sukuk. Then there are other investment products like deposits, gold to real estate. Each investment product has its advantages or advantages and risks. All of them have their level of risk ranging from the highest like stocks to the lowest like bank deposits.
Start with a small investment
Are you starting a profitable investment with a capital of 10 million or less? Why not? You can invest on several e-commerce platforms with a capital of IDR 10,000 via a gold savings scheme. The point is, you can set aside 10% of your salary for future mutual funds versus spending on consumer needs. You can start investing in stocks or mutual funds that have performed well over the past five years. Don’t forget to brush up on your knowledge and learn about mutual fund and stock investing tips that are floating around the internet.
How, interested in making profitable investments with small capital? You can customize each investment based on your risk profile or timeframe. Good luck with the above profitable investments for the future!