Since childhood, we are told to save our money! But did we? A majority of us will say ‘No!’ to this question. I’d say ‘better late than never’! Just saving money now won’t help you create wealth! We need to multiply it along with saving! That’s ‘investing’. We live in a digital age. Gone are the days when one had to fill out ‘n’ number of forms to complete KYC norms and what not. Today it can be done in a matter of a few clicks! You can get started by investing just ₹100 per month! Read on to know how to create wealth through mutual funds.
How do mutual funds help you realize your dream and create wealth?
Investing directly in share market needs knowledge, time and patience! But it helps you make millions of bucks without starting a business! Does that mean if one wishes to create wealth doing nothing, he’ll have to study business and stock market? No!
Mutual Funds comes in! If we check the average return on mutual funds for the last 20 years, it’s mind-blowing.
Let’s take an example of Reliance Growth Fund. It was started 22 years ago. This year its NAV touched Rupees 1000 mark. It’s sip returns chart shows that an investor who had put in ₹10 in the fund at its inception would have seen his fund grow over 100 times in nearly 22 years. One lakh invested in this fund at its inception would have been worth 1 crore today. This is an example of the best sip to invest for highest growth.
Create wealth by investing in Mutual Fund
I had written a post on how can one retire with ₹5 Crores by investing just ₹3700 per month. You’ll find it interesting if you are on a mission to create wealth using mutual funds!
According to Wikipedia, “A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities”. In layman language we can say: It is a fund which comprises of investors'(your) money, which a professional and experienced fund manager manages, who knows how much, when and at what price to buy or sell a share in market on your behalf so that you don’t make mistakes, lose your money and time and helps you create wealth!
One advantage of mutual funds is that mutual funds provide a higher level of diversification, they provide liquidity, has the power of compounding and furthermore, they are managed by professional investors(known as fund managers). On the contradictory side, investors in a mutual fund must pay nominal fees and expenses.
Best performing mutual funds last 10 years
- Reliance Growth Fund. Fund Manager: Sunil Singhania.
- Franklin India Blue Chip Fund. Fund Managers: Anand Radhakrishnan & Anand Vasudevan.
- HDFC Equity. Fund Manager: Prashant Jain.
- Birla Sun Life Advantage Fund. Fund Manager: Satyabrata Mohanty.
- Franklin India Prima Fund. Fund Manager: R Janakiraman.
Create wealth by investing in Stock Market
The stock market is an exchange where you buy shares of a company through a broker. You pay a small fee for a brokerage but this is the way which can bring you a fortune if you invest in a company which grows to be a billion-dollar company. Infosys started on 7 July 1981 with an initial capital of ₹10000 and on January 12, 2017, its market capitalization was $34.38 Billion. If one had invested in this company he would already be a billionaire! This was just an example. You can make 1 crore in 10 years very easily.
There are many brokers out there but a majority of them has a high brokerage. I’d recommend Zerodha. It is a discount brokerage. Most noteworthy buying and selling equity shares is free of cost. Yes, zero brokerage. Bear with me and I’ll disclose the secrets of becoming a billionaire. 🙂
The central government has re-introduced the 10% long-term capital gains (LTCG) tax.
Power of compounding can help you become rich! Do you need any other reason to invest? I don’t think so! It helps you create wealth and become rich! That’s the beauty of it.
Incredibly powerful in multiplying money
The beauty of compounding is that you don’t have to work for every penny. Your money will work for you. Yes, money makes money. Investing 1000 bucks per month at 10% annual rate of interest for 10 years makes it more than double the invested amount. What did you do? Nothing. You money worked for you! This was just an example of a small amount! Invest more than that in Equity Mutual Funds and you can even get up to 70% annual interest or in share market directly and you may even get more than 100% returns within a short span of time. In the long run, generally one may get between 10-20% annual returns which is the power of Equity.
Power of compounding can make you a Millionaire
What’s a million? It’s 1000000 in numbers. And what’s a crore? Its 10000000 in numbers.
To get this amount, you just need to invest. No hard work. Nothing. Investing just 3000 bucks per month at 18% will give you more than a million in 10 years. Total investment would be just 360K and your profit would be the rest amount ie. 640K.
What you need to know is where an how to invest! That’s the most important thing. You will lose all your money otherwise. I’ll help you with that!
Helps you live your dream life.
Ever dreamed of living a life full of traveling abroad? Or a life enjoying on a beach without working full time? Or building a retirement fund in crores? You must have! No doubt! Everybody wants that!
But a majority of people could not achieve that because they don’t have a perfect guidance to multiply their money and end up wasting all their life earnings. Using this guide, you will live your dream life. Some articles that are worth reading:
Mutual Funds in 7 Easy Steps
- Step #1: PAN Number (Get a PAN Number, if you don’t possess already)
- Step #2: Bank account (Get a full-fledged bank account with Internet Banking, if you don’t have already)
- Step #3: Additionally, it would be nice of you to learn some basic terminology of Mutual Funds.
- Step #4: Register on Zerodha to get started!
- Step $5: In addition to these, after registering on Zerodha of course, one needs to get KYC verification done which is a 2 minutes step with Aadhaar OTP method if one has an Aadhaar Number.
- Step $6: Get In-person verification done! They’ll do that very smoothly through Whatsapp!
- Step $7: Start Investing!
You can invest ₹100 per month in Reliance Top 200 Plan and Reliance Small Cap Funds. They are awesome and have very good returns!
What are your thoughts on Wealth Creation using Mutual Funds? Do let me know in the comments section below. Also, do not forget to subscribe to Wroffle. To do so, just tap the bell icon at the bottom-left of your screen.