Mutual Funds?

 What can be a  New Year's Resolution for 2019?

I found a perfect new year's resolution that is MUTUAL FUNDS

What are mutual funds?

A mutual fund is a method of investing money,

from where we get returns more than any savings account or FD(Fixed Deposit).

Type of ways how we can save/invest money?

1. Savings Account
2. Fixed Deposit 
3. Gold
4. Real estate

What is a Savings Account?

A Savings account is a deposit account held at a retail bank that pays interest but cannot be used directly as money in the narrow sense of a medium of exchange (for example, by writing a cheque).

What is FD? 

Fixed deposits are investment instruments offered by banks and non-banking financial companies, where you can deposit money for a higher rate of interest than savings accounts. Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw them after paying a penalty.

Problem with them

In 2020 the inflation rate will be 4.06, It was 10% in 2012

But first, we should know what is inflation?

In general, inflation is a continuous rise in prices caused by an increase in the money supply and demand for goods

Report

https://www.statista.com/statistics/271322/inflation-rate-in-india

Savings account - you will get a return of 4-5%

Fixed Deposit - you will get a return of 7-8%

Gold - Highly risky (price is never fixed)

Real estate - can give a good return if you have good knowledge of upcoming projects of government.

If, the inflation rate is 4 % 
The value of money is decreasing day by day if you invest in 

Saving account is useless. (It won't increase  your  money)

Fixed deposit is given only 4% (8%- inflation rate  )

What's the Solution? The answer is to invest in mutual funds.

Do you know? Top 1000 richest people on earth invest their money in stocks and different companies. It's a passive income for them, which gives a high return.

We don't invest directly in stock because we don't have enough knowledge of stocks and we want a stable life.

But, this is what we can do.

Invest some amount in mutual funds monthly or quarterly basis and secure your 60's

How Mutual Fund Works?

You invest your money in Asset Management Company (AMC), AMC invests your money in different share, stocks and in startups. 

AMCs are the companies which invest your money, in different shares, stocks, etc.

List of some AMCs you know.

• ICICI Prudential Mutual Fund.
• HDFC Mutual Fund.
• Aditya Birla Sun Life Mutual Fund.
• Reliance Mutual Fund.
• SBI Mutual Fund.
• UTI Mutual Fund.
• Kotak Mahindra Mutual Fund.
• Franklin Templeton Mutual Fund

Mutual funds can give you return from 12% to 24% 

A mutual fund is managed by the Fund manager. The Fund Manager is responsible for investing all your money.

How AMCs earn money?

An AMC will charge you approx. 2 to 3% as a commission and the remaining (97-98% ) is yours.

Now the question is, in which type of shares your funds are invested?

Let's discuss
 What is Large-Cap?

In general, top 50 companies which are present in the market are Large cap. Some of the names are:

If your money is invested in large-cap shares it is invested in some big budget companies like these.

What is Small Cap?

In general, startups are the small-cap companies whose stocks are less in price.

Those companies which are in the middle are called Mid-cap companies which are neither too big nor too small.

What you should know before investing in mutual funds?

1. You should know the terms and conditions of your fund.
2. Track record of the fund, i.e. How much return it has given in the past 5-10 years?
3. Who is the Fund manager?
4. If the company is authorized by SEBI or not?

What is SEBI?
The Securities and Exchange Board of India (SEBI) is the regulator for the security of market in India

OFFICIAL site - https://www.sebi.gov.in

If any company or scheme is not registered with SEBI, you should not invest in that company as it possibly could be a fraud company.

What should you do, if you are interested in Mutual Funds?

Invest in a mutual fund with a minimum SIP of 500 and more.

Time duration  40 years. 

How can you calculate your SIP amount after years?

• Go to SIP calculator website (https://sipcalculator.in) 

• Fill SIP  amount

• Fill Time 

• Enter Rate

• The result will be displayed

Example:-

.

So, you have invested Rs 500/month for 40 years and the expected rate is 15% 

Now, you have more than 1 Cr when you are at the age of 65.

This is real and possible if you invest in some good mutual fund

How to invest in MUTUAL FUNDS?

We can invest in mutual funds by  2 ways:

1. Direct (Direct to companies)

1. Regular (Agent)

Direct is always better than regular. A regular AMC charges  2-3% and a direct AMC charges 1.25 to 1.5%

You can invest directly through 

• Paytm
• GROWW
• paisabazar.com

How does the GROWW app work?

If you wanna try this App click here
if you download GROWW app using this link you will get some free coins which help you to unlock some feature of GROWW app.

Why we should plan our 60's?

You can divide your life into 3 parts

Part one(0-25 years)

Most of the time passes by in studying and in college

Part-2 (25 to 55 years)

Most important and crucial time, which includes job, family, kids, etc. 

Part 3

 After 60, you can live a sad life and be dependent on someone.

But, if you plan your 60's you will be like this

• Independent 
• Happy
• Enough money
• Respect, which eventually comes with money
• Spend time with loved ones 
• Die happily

Save from 20's, Enjoy in 60's

Also read:-

https://www.techhackandlifestyle.tk/2018/11/best-jobs-for-future.html

https://www.techhackandlifestyle.tk/2018/12/what-is-big-data.html