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Mutual Funds

Mutual Funds: Do You Really Need It? This Will Help You Decide!

Sometimes it may feel impossible to be achieving few goals of yours that you think of accomplishing in your lifetime. Your dream can be anything like:

  • Buying a duplex villa;
  • Buying 2 luxury cars;
  • Funding for your child’s higher education abroad;
  • Vacationing on annual international holiday;
  • Luxurious post retirement life; etc.

So many people dream of such things listed above, but only a handful of them are able to turn them into a reality. It’s very important that one sets their financial goals in a realistic and most imperative way. Once the goals are set, all you need is a #SabseImportantPlan which shall enable you to achieve your goals within the set time frame. This can simply be termed as Financial Planning for oneself. Financial planning is an instrument by which you can draw out a definite plan with the aim of achieving your financial goals. Thus, guaranteeing your peace of mind at several stages of your life cycle.

Baby Steps Culminate in the Investing Marathon: It’s been quoted, ‘sometimes the smallest step in the right direction, end up being the biggest step of your life’. One does not become a millionaire in a day. It takes time, efforts, patience, energy, and a due-diligent investment strategy which has a potential to fulfil maximum of your dreams. The ambitious folks looking out for achieving their dreams could belong to any of the categories from Millennials & Gen-X. The set of goals could be different for these two categories of people. For instance, the Millennials want to have a bigger house or more luxurious car and the Gen-X would want to save fairly for their retirement to be approaching through. Though their goals and sub-goals are different from each other’s but all they want is to chase their goals in a definite time frame. This requires a proper management of money and taking baby steps towards achievement of their goals out of every month’s pay check. “Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do… it is a matter of managing your money properly.” – Noel Whittaker

Let yourself go the Mutual Fund way: Just as we allocate amount to be paid for monthly rent, grocery, maids etc.; we should be allocating funds to be invested every month to achieve our goals as well. Once our fund allocation is properly structured in order to achieve our goals, the next thing we need to do is select the perfect tool for it to invest in.

Amongst all the investment tools available these days, mutual funds are one of the best ones and chosen the most by people for multiplying their money. Though diversification of portfolio is always encouraged, as it empowers your portfolio with great benefits. Mutual Fund investments come with several benefits as discussed below:

  • Professionally Managed Avenue: The Mutual Funds are managed by professional fund managers, who are experienced enough to be making the funds’ investment in the most appropriate one and give you the maximum returns.
  • Lower Investment at Entry Level: Mutual Fund investments can be made with an amount as small as INR. 1000. This initial investment encourages a person to start small but stay invested for a long period. As the time passes by, the hunger for a big amount investment begins to sprout in the investor and then they start saving more and hence investing more.
  • Varied Services for Investors: There are multiple Asset Management Companies, like Aditya Birla Sun Life Mutual Fund, which offer

varied plans of mutual fund such as SIP (Systematic Investment Plan) / STP (Systematic Transfer Plan). Also for simplifying pulling out the money too (taking care of your liquidity part or the cash flow requirements), SWPs (Systematic Withdrawal Plans) are prepared, thus permitting you to manage your portfolio from a financial planning viewpoint.

By all accounts the best method to assign one’s funds is to invest in mutual funds via Systematic Investment Plan.

Here are some of the Benefits of SIPs:

  • SIPs can be set at as low as for INR. 1000 per month; so they are light on the wallet and one can increase the amount gradually so that more and more money goes into investment.
  • SIPs make market’s positioning immaterial for the investor, as an investor keeps on investing on a set particular fixed date rather than keeping a hawk’s eye on the market for a specific stock.
  • SIPs enables rupee-cost averaging as it is a technique in which one invests a fixed amount of money at systematic intervals. This way the investor makes sure that they buy more number of shares of an investment when prices are low and less when the prices are high.
  • SIPs provide the benefit to investors from the power of compounding. The best part of compounding is its tendency to accumulate enormous value over a little period of time. As the returns on an investment start earning themselves and the profit begins to pile up at a mammoth pace.
  • SIPs help achieve our goal planning because they enable an early start to the investment and ensure success by the power of compounding of the same.

Aditya Birla Sun Life Mutual fund is available for a comprehensive assortment of life goals and is a stress-free way for investors to receive the aids of investing without having to do in-depth research or analysis. Mutual funds offer diversification, ease, tax efficiency as well as many other benefits to the investor.

About Vikas Agarwal

Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of Finaacle.com - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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