What are Investment Options for Entrepreneurs?

4 mins read
by Angel One
Explore a wide range of smart and beginner-friendly investment options for entrepreneurs, from mutual funds to real estate, to diversify their income, reduce risk, and grow long-term wealth.

Investment options for entrepreneurs can go far beyond just reinvesting profits back into their business. While growing a venture is often the top priority, smart investing can help entrepreneurs diversify their income, manage risks, and build long-term wealth. If you’re running your own business and wondering where else to put your money, this article is for you.

Let’s walk through some investment options that can help you make the most of your hard-earned money.

Read More About What is Investment?

Why Should Entrepreneurs Consider Investing?

As an entrepreneur, your business may already feel like your biggest investment. But putting all your money in one place can be risky. What if the market changes or your business faces unexpected challenges? This is why exploring other investment options makes sense.

By investing wisely, you can:

  • Create an extra income stream
  • Build a financial safety net
  • Grow your money over time
  • Save for future goals like retirement or your child’s education

The good news is you don’t need a finance degree to get started. There are plenty of investment options that are simple and manageable, even for busy entrepreneurs.

As an entrepreneur, your financial journey doesn’t have to stop with your business. Here are some accessible and practical investment options that can help you grow your wealth, manage risks, and plan for the future.

  1. Mutual Funds

Mutual funds are a great starting point for entrepreneurs who want to invest without diving too deep into the stock market. These funds pool money from many investors and are managed by professionals. 

You can choose from Equity mutual funds (for higher returns and higher risk), Debt mutual funds (for lower risk and steady returns) and Hybrid mutual funds (a mix of both). They are flexible, and you can start with small amounts using SIPs (Systematic Investment Plans).

  1. Public Provident Fund (PPF)

PPF is a government-backed savings scheme that offers guaranteed returns and tax benefits. It has a 15-year lock-in period, which might seem long, but it’s ideal for long-term goals like retirement.

You can invest as little as ₹500 per year, and the interest is tax-free. For entrepreneurs who want a safe and secure option, PPF is worth considering.

  1. Stocks (Shares)

Investing in the equity market can be rewarding if you’re willing to take some risks and do a bit of homework. Stocks let you buy a piece of a company, and your money grows as the company grows.

  1. Real Estate

Real estate can be a strong investment, especially if you’re looking at rental income or long-term appreciation. Many entrepreneurs invest in, residential property (homes, flats), commercial property (offices, shops) or REITs (Real Estate Investment Trusts) for a low-cost, low-hassle option. It requires more capital, but it’s often seen as a solid asset to hold.

  1. Gold

Gold is a traditional investment option in India. Today, you can also invest in digital gold, which is easier to buy and store. It’s a good way to hedge against inflation and market uncertainty. You can invest in physical gold (jewellery, coins, bars) or digital gold.

  1. Startup Investments

Some entrepreneurs enjoy investing in other startups. This allows you to support new ideas and potentially earn high returns. However, this comes with high risk and should only be done with money you can afford to lose.

Platforms like AngelList or Indian startup networks can help you connect with early-stage companies looking for investors.

  1. Fixed Deposits (FDs)

If you’re looking for stability, fixed deposits in banks or NBFCs (Non-Banking Financial Companies) are a good choice. They offer a fixed rate of return over a set period, and your capital is usually considered to be safe.

It’s not the most exciting option, but it works well for parking surplus cash safely.

Conclusion

Exploring investment options for entrepreneurs is all about balance. You don’t have to pick just one, in fact, it’s better to diversify. Mix safer options like PPF or FDs with higher-risk, higher-reward ones like equity funds or stocks.

Start small, stay consistent, and choose investments that align with your goals, time frame, and risk appetite. Remember, as an entrepreneur, your ability to take calculated risks gives you an edge, just make sure your money works as hard as you do.

FAQs

What are the less risky investment options for entrepreneurs?

PPF and FDs are considered to be comparatively less risky. They offer stable returns and might be ideal for long-term financial security. 

Can I start investing with a small amount?

Many options, like mutual funds and SIPs allow you to start with as little as ₹100. Starting small and investing regularly can build wealth over time. 

Should I reinvest in my business or explore other investments

While reinvesting in your business can offer high returns, diversifying reduces risk. It’s smart to balance both based on your business growth and personal goals. 

Is stock market investing good for entrepreneurs?

It can be a great option if you’re comfortable with some risk and can stay informed. Start with blue-chip stocks or mutual funds if you’re a beginner. 

What is digital gold, and how does it work?

Digital gold lets you invest in real gold online without physically storing it. It’s easy to buy in small amounts and is backed by actual gold reserves. 

Are there any tax benefits in these investments?

Options like PPF, ELSS mutual funds, and certain FDs offer tax benefits under Section 80C. Always check current tax rules before investing.