Mutual Funds & its Types

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Mutual Funds are the collective money of different investors who aim at saving money and making money through investments. The collected money will be invested back in various funds to earn returns. The Mutual Funds are categorized based on investment objective, structure and asset class.

Types of Mutual funds based on Asset Class:

  • Equity Mutual Funds: These funds are mainly invested in the Stock market. They are also called as “Stock Funds”. Equity Funds generate higher returns when compared with other fixed-income instruments such as FDs and Debt Funds. These funds best suited to those investors who are willing to see growth along with higher returns.
    These funds are further categorized into large-cap funds, mid-cap funds, small-cap funds, sectoral funds, index funds, etc.
  • Debt Mutual Funds: These are the kind of mutual funds where the investments are made in debt or fixed income securities such as government securities, corporate bonds, and money market instruments. Investors will invest in these funds because they are more risk averse and want to maintain stability in their asset portfolio. And these Debt funds come up with tax deductions and are highly liquid. They are “Safe investment instrument”
    There are different kinds of Debt funds such as Guilt funds, credit risk funds, floater funds, etc.
  • Hybrid Mutual Funds: Hybrid funds are both the mixture of Equity and Debt funds. The investors invest in these funds to avail the benefits of investing both Equity and Debt. It enables investors to have a diversified portfolio and can have access to different asset classes.
    The different kinds of Hybrid funds are balanced hybrid funds, Aggressive hybrid funds, and conservative hybrid funds.

Type of Mutual funds based on the Structure:

  • Open-Ended funds: These are the investment instruments that deal with the “Units” that are purchased or redeemed throughout the year. The purchase or redemption is based on the NAV (Net Asset Value). These instruments are highly liquid.
  • Close-Ended funds: These instruments deal with the “Units” which can be purchased only during the initial stages and can be redeemed only on the specific maturity date, and these are highly liquid.

Types of Mutual funds based on Investment Objective:

  • Growth funds: Here, the investors will always opt of “Equity Funds” because these funds come up with higher returns along with capital appreciation. Investors invest in these to see growth in their wealth and prefer to have an investment for the long term.
  • Income funds: Investments are made in “fixed-income instruments” such as debentures and bonds because they offer regular income along with capital protection.
  • Liquid funds: Liquid Mutual Fund investments are made in short term instruments such as commercial papers and treasury bills because they offer moderate returns and they have a low-risk factor with high liquidity.

Types of Mutual funds based on Investment Goals:

Investments are made by the investors in Mutual funds with a specific goal set.

  • Aggressive growth funds: These funds have a great chance of sudden growth and fetch higher returns. The risk involved is very high because they see high price fluctuations. It suits the investors who are willing to have an investment for more than 5 years.
  • Growth funds: Investors prefer growth fund because they want to make use of growth along with the profits.most of the time it is proved that growth funds are profitable.
  • Balanced funds: These funds are the fusion of income and growth. These funds provide investors with income and at the same time offers the possibility of growth. And income and growth will be moderate.
  • Income funds: These funds best suits for the investors who are retired. These are the funds where the investment is made in fixed-income securities that offer moderate returns and they are less risky.

Then what are you waiting for? Start investing in Mutual funds. It’s never too late to start. Install the MyWay Wealth app in your phone and start your investment with just Rs 100.

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Think investment, Think MyWay Wealth!!!

Choose between Direct and Regular plan

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When you buy something, you will always try to cut expenses. Suppose if we buy any product online, you prefer to have free delivery. Why you do that? In order to reduce costs, you’ll try to cut the additional expenses which you don’t want to incur. Here, you do the same with the Mutual Funds.

In the market, we can buy Mutual funds in 2 ways:

  1. Directly from Asset Management Company (AMC) – Direct Plan
  2. We choose to buy through an intermediary – Regular Plan

In Regular plan, you buy mutual funds through an intermediary such as brokers, distributors or advisors. And these agents will charge a commission for the services they provide where your expenses on investments will be high. As you know that these brokers will never sell you the products that you need. They always try to push the schemes which earn a good profit to them.

Now let’s look at Direct Plans. Direct Plan is a new regulation which is enforced by SEBI on January 1, 2013. In the Direct Plan, as an investor, you can directly buy the mutual funds from the Asset Management Company (AMC), where there will be no involvement of any brokers or intermediaries and these funds which you buy are commission free.

The great advantage of Direct Plans is that NAV (Net Asset Value i.e., the value per share) is more when compared to Regular Plan which means that you earn more on your investments.
For example, if you invest Rs 10 lakhs in both the Direct Plan and Regular Plan. The direct plan offers 17- 19% of returns whereas the Regular Plan offers 14-15% of returns. Thus, With Direct Plans you can earn 1-15% more returns than Regular Plans.

And here you have a platform to make an investment in Direct Plan- MyWay Wealth with zero commission and zero fees. MyWay Wealth offers you a wide range of funds and helps you to choose the right one that suits your investment needs. To look into more features of MyWay Wealth – download the app, complete KYC and get access to top recommended funds.Screen_Shots

How to decide on Direct plan and Regular Plan?

  • If you already have an experience of investing in mutual funds, it is recommendable to go for Direct Plan, since you will have enough knowledge on mutual funds.
  • If you are a beginner then you can opt for Regular Plan and it is recommendable that you can switch to Direct Plan once you gain knowledge and experience in investing.

So don’t miss out on those 1.5% extra return. Choose MyWay Wealth and begin your journey to fulfill your dreams.

You are unique and so is your Investment!

MyWay Wealth Weekly Update (Issue #37): All that glitters IS gold and more…

Indian Indices ended the week in red, but gold has lived up to its reputation of being a safe haven asset class and appreciated by 3.10% for the same period.

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#Top2: Reasons for gold regaining sheen

  • The dovish stance from major central banks:

The Federal Open Market Committee (FOMC), the policy-making arm of the U.S. Fed kept rates unchanged in a range of 2.25% to 2.5% on Wednesday even as it signaled that it is ready to cut if data so warrants. Along with the US, the other central banks like Australia, Europe signaled to ease their monetary policies to support economic growth.

  • Gold buying by major central banks:

Global Central Banks, especially of countries having exposure to America’s unexpected policies, seem to be loading up on their gold reserves as a hedge against any major economic headwinds they may face.

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Bottom line:

Gold as an asset class is known to be a natural hedge to economic risks your portfolio may be exposed to. While this short-term gleam in gold prices does not warrant an out and out investment into gold, it sure strengthens the case for a diversified asset allocation into equity, debt, and gold.

It makes sense for investors to hold an indicative ~5%-10% of the total portfolio in gold mutual funds or digital gold to maintain a well-diversified portfolio that will help build a consistent, sustainable and risk-optimal portfolio for the longer term.

De-Jargon SIP, STP and SWP

SIP, STP, SWP

Net Asset Value

NAV stands for Net Asset Value. Generally, the “net” arrives only when you remove the cost incurred from the price.

For example: Imagine there are 100 investors and each invested Rs 1,000 in an Equity fund. Each unit price will be Rs 10. Then the sum of Rs 1 lakh is invested in various stocks of mutual funds. A year later the value of Rs 1 lakh will be turned out to Rs 1.5 lakhs, giving a profit of Rs 50k.  If the cost of 10k is removed, then the profit earned is 40k. Then, the unit price will go from Rs 10 to Rs 14. Now, your 100 units worth is Rs 1.400.

Thus,

  • Investors can access the performance of the fund through the NAV differentials.
  • NAV helps to identify potential investment opportunities.
  • One can also use NAV to view the holdings in their portfolio.

Systematic Investment Plan

Why everybody is talking about SIP? What’s this cool new thing that you should know about.

SIP is a Systematic Investment Plan. This is the same as your Recurring deposits where you make periodic investments into mutual funds. Fixed money will be deducted from your bank savings account and will be directed towards the mutual fund for which you have opted for.

The two things which are good about SIP:

  1. Some people make a target for saving in SIP and spend the rest. Thus it’s very useful in building the habit of regular investment.
  2. SIP allows you to average out your price as you invest over the years, either monthly or quarterly.
  3. Also, SIP helps in reducing the risk of the market as it spreads the money throughout the various market cycle.

How SIP is different from a one-time investment:

SIP One- time investment
Periodic investment Lump sum investment
Earns better even when markets are low Earns when markets are high
Protect investment from a market crash Investments will be affected due to the market crash

MyWay Wealth

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Remember, Systematic Investment Plan is a vehicle, not a goal, you use a SIP to make investments and you can choose to have financial adviser if needed.

You can start investing in SIP with just Rs 100. Here, you have the best investment platform- MyWay Wealth.

STP- Systematic Transfer Plan:

Investors worry about making lump sum investments because of risk appetite. This is where STP helps you to mitigate the risk. In SIP, you will move your money from saving to a mutual fund whereas, in STP,  you will move your money from one fund to another. Instead of investing all in one go, you can put money in a liquid fund and set up a monthly/ weekly/ yearly transfers into different equity schemes.

SWP- Systematic Withdrawal Plan:

Here, you can either choose to withdraw capital gains on your investments or a fixed amount.this way you will not only have money still invested in the scheme but also it can be part of your regular income and returns.

Why SWP?

  1. With the SWP, you can time your withdrawals as per your financial needs. It ensures the availability of funds at the right time.
  2. With this plan, an investor can create a flow of income from an investment that is regular.

Hope this article helped you to understand the various ways of investing. Remember to make a thorough analysis of each before you make your choice. However, the most recommended option is SIP as it allows you to get into the habit of saving and provides the benefit of compounding.

Think Smart! Think MyWay Wealth!

A solution for your Emergencies

Emergency funds

Keeping money aside to face your emergencies is important. We all do have a situation where we need money – it can be a medical emergency, sudden job loss, disability or certain health issues which may stop you from earning. One should be very clear on the statement that – Your emergency funds cannot become your savings whereas your savings can be your emergency fund. Your savings and emergency funds are not the same. They are two different things. These two are differentiated based on an individual’s planned and unplanned expenses. Generally, savings are made to meet one’s planned expenses.

For example: Think about buying a car, where you will pull all your savings, take a loan or you borrow from your relatives or friends. These are events you can prepare and plan for. Then what about unplanned expenses? Sudden job loss, huge medical expenses, health issues that stop you from earning all these can be one’s unplanned expenses. This is why we create an Emergency Fund.

Savings and emergency funds are two different categories. Savings provide you the financial freedom to make an investment which can be for a short or a long term and helps you meet your financial needs. Whereas emergency fund provides you the financial security by assisting you in financial crisis.

How much you need for an Emergency Fund?

Roughly keep aside six months of your living expenses including your EMI, rent and school fee. You can increase or decrease this figure based on your personal situations. Say you have decided to have an emergency fund of Rs.1 lakh, in this case, you can put aside money of Rs 5,000 or Rs 10,000 every month. On being more specific:

  1. If you and your spouse both are working and have no dependents, in such cases, 3 months of your living expenses can be kept aside for an emergency fund.
  2. If you are a sole bread earner of in your family and you have many dependents then one year of your living expenses can be kept aside for an emergency fund.
  3. If you are risk-averse, then you can keep a year’s expense like an emergency fund.

Where you keep this money?

The money which you keep aside i.e., an emergency fund cannot be kept idle. So you can move these funds to a place where the accessibility is less and liquidity is high and offers better returns than a savings account. Accessibility is less because more often you cannot take out the money unless its an emergency.
Fixed deposits can be an easy option. Certain banks offer flexible FD’s that will allow you to sweep the money that you need without any additional charges. Hence you can go for it.

Another popular investment option is – “The Mutual Funds”. You can go for short- term debt funds to build an emergency fund. These debt funds offer you a better return when compared with FD’s. These debt funds are more flexible and the incident of tax is very less comparatively.

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Therefore, set yourself a target and plan accordingly. Make a regular monthly credit towards your emergency funds. Hence be prepared for uncertainties of tomorrow. If you don’t have anything saved towards an Emergency Fund, it is not too late to get started. So, start with MyWay Wealth.

The little you put, the more you can do!

Understand the rules for investing in Equity

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Getting equity exposure is about following the rules for holding the portfolio to see index-plus returns( high returns). Take a considerate decision on investing in Equity and understand that the Equities are the best way to create wealth.

Rules for investing in Equity:

  • Have the patience to see consistent returns. If you buy equity with a holding period of 10 years, you’ll be able to see interesting returns(positive returns) in the 7th year of your investing. This happens because the fluctuation in the returns will start reducing and then on average, you’ll see returns which will above 14-15% per year. Thus, have the patience to have investments in the long term.
  • You’ll be at risk if you choose a poor product. If you opt for a poor product with a long holding period and later you find yourself that you did worse than the average product in the market. So, be careful while choosing a product and be very particular on your risk bearing capability.
  • What if you find out yourself frozen in choosing Equity products. Firstly, understand the Equities completely.

There are 3 ways to buy equity:

  1. Direct stock
  2. Market-linked products(ULIP’s)
  3. Mutual Funds.

You can invest in Equity Funds through MyWay Wealth. They are professionally managed by expert professionals who spend quality time in researching about the performance of these funds.

The benefits include:

  1. You can invest in Equity Mutual Funds that have provided returns >15% for the past 5 years.
  2. They offer you an opportunity to redeem your investments at any time (Except for Equity Linked Saving Schemes-‘ELSS’ which has a lock-in period of 3 years).
  3. Equity mutual fund schemes avail you a facility to invest small sums at regular intervals through systematic investment plans (SIP).
  • Do not invest in any product that locks you in a particular company or asset manager. Always opt for the product where the “Exit” is possible with an easy and cheap procedure. And also look for the “portability” where you should be able to move your money more easily to the better fund investment with minimum cost.
  • If you want to manage your funds by yourself, start learning about the products through online platforms and try to look in the records to know how the funds are performing over the years and then invest. Always remember, “Not investing in Equity” is not your option.

Thus, put your money to work for the long term. If you’re a good financial planner then you would have already planned for your Emergency funds and medical cover. So, you have taken away the need for keeping money in liquid and you can risk for investing in Equity Mutual Funds.

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Here, you have the best platform -“MyWay Wealth” to invest in Equity Funds and create wealth for the long term. Use MyWay Wealth to discover, track and invest in Equity Funds.

Are investments in Real Estate really safe?

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We have heard our elders saying that “Invest in Real estate, the future value of the property will fetch you prosperous wealth.” Is it true?

Let us now discuss how a Real estate as an investment option.
Yes, Investment in Real Estate can generate a regular income, and you can see capital appreciation over a period of time. People think Real estate as an investment option is good only because they look only into the returns ignoring the other factors.

There are other factors that you need to consider:

  1. Risk factor: There is more risk involved if you buy a property, and risk comes in the form of property disputes, your property can be grabbed, finding the tenant becomes difficult.
  2. Additional expenses: Incurring more expenses can affect your returns. Expenses such as brokerage chargers, maintenance costs, taxes will be incurred by you. You will pay all these expenses from your returns.
  3. Low liquidity: In case of emergency, to can’t sell a part of your property and make money and also your need for cash can make you sell the property at a lower price than its original cost. Thus, you incur a loss.
  4. Market fluctuations: Yes, there has been a time where you can sell your property more than 10 times its original value but the things are changed and are not the same.

Reasons why an investor should avoid investing in Real Estate

  • An under performing asset class as it gives more or less the same returns as FDs and offers an annual rent between 2-5% which is very less when compared with the returns earned on FDs
  • The value of a property depends on the geographical location of a property which makes a real asset as an unpredictable asset class.
  • The typical mentality of investors where they link properties to memories and emotions ignoring the returns on investment.
  • Liquidity is less because when you need immediate cash, you can’t find buyers easily and need of cash can make you sell the property at a lower cost than its market value.
    They are subjected to more litigation and the risk involved is high because of property disputes or your
  • property can be grabbed.

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Thus, these are the disadvantages of having investments in Real Estate. But is an alternative? Yes! there are better options to invest such as Mutual Funds. Direct Plans, SIPs, Gold Funds or Equity Mutual Funds help you with wealth creation in the long term. Use “MyWay Wealth” to discover, track and invest in Mutual Funds.

Don’t invest in better, invest in the best!

Expose your money to Equity!

Equity investment earns you the best returns when compared with the other investment options. Now, let’s understand the true nature of all the investment options.

Investment options Initial investment Finally earned

(principle+returns)

Fixed deposit 1 lakh 19.35 lakhs
Gold 1 lakh 16.10 lakhs
Public Provident Fund 1 lakh 32.78 lakhs
Equity 1 lakh 2.3 crores

 *A period of investment is considered as 30 years for all the investment options.

Then what are these Equities?

Equities are the stocks/ shares that are listed in the stock exchanges which are traded at the market price. You can invest in Equities in two ways:

  1. Direct investing in Equities-You will directly purchase stocks of listed companies through a demat account.
  2. Investing in Equities through mutual funds.

Why one should not buy Equities directly?

Think, how do you know which companies equities to buy?

Because, if you are new to investing, then opting for the wrong equities will cost your money and peace of mind. When you decide to buy equities through mutual funds, you outsource your decision to the Stock Experts. As an investor, one only needs to invest the desired amount and become a part of the fund holdings, and the professional managers will do this job.

Key advantages of investing in Equities through mutual funds:

  • They are professionally managed by expert professionals spend quality time in researching about the future performance of companies.
  • You get an exposure to various stocks when you are invested in an equity mutual fund scheme
  • They offer you an opportunity to redeem your investments at any time (Except for Equity Linked Saving Schemes-‘ELSS’ which has a lock-in period of 3 years).
  • Equity mutual fund schemes avail you a facility to invest small sums at regular intervals through systematic investment plans (SIP).

How to invest in equity mutual funds through?

You can start investing in Equities Mutual funds through MyWay Wealth. MyWay Wealth provides you smart recommendations to build your wealth scientifically and financially.

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Thus, be smart in choosing your investment option. Always opt for investment that matches your financial goals and risk appetite, choose the scheme that matches your profile. Equities will end dependency on gold, real estate, and FDs.

It is not market timing but time in the market that matters!

Build your Portfolio with the right Asset class

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We’ve grown up with FD’s, Real estate and Gold as a “Holy Grail” of investments. Let’s understand the true nature of all the investment options which you can include in your portfolio.

Basic finance is not tough to understand, but it’s good to have knowledge in finance which will help you in choosing the right product that suits your financial needs. Finance keep things tough because the less you understand, the more you can be cheated. It just takes common sense and some time to ‘get’ finance.

Before we choose the financial product, we do look into aspects such as the cost, the number of years you want to have that product, risk and security, and the post-tax returns that you earn.

There are various investment options available

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Let’s talk on “Debt” as an Investment Option

When we hear the word “Debt” makes us think about all the debts that we have (car loan, house loan). Here the “debt” forms a part of your portfolio where you’ll get fixed returns likes your FD and Public Provident Fund. Debt is based on borrowing- where the bank will borrow money from you for a fixed and periodic return. The principal amount will be given back to you upon the completion of the agreed time period.

Why do you earn interest on your money?

  • Because you delay your consumption- you get compensated for this.
  • You bear the risk of the borrower not returning it.
  • You take the risk of money-losing its value (due to inflation).

Why do government bonds pay less interest?

Higher the Risk- Higher the Return. The more you get paid on your lending, the more risk you take (Risk→ non-payment of both your investment and interest is much higher).

Debt product with Guaranteed Return:

  • Public Provident Fund
  • Employees Provident Fund
  • Fixed Deposits
  • Corporate Deposits
  • Bonds

Features:

  • Debt product provides money at short notice and stability for long term investments.
  • These are safe, tax-free, and provide a solid core to your portfolio.

Why not put all your money into debt?

We want to be certain about what we get back in the future. If you drop your entire money into debt- your risk will be high, where the chances of getting the money back become doubtful. And also you can’t see the growth in debt when compared with Equities. Debt is for stability rather than growth.

Is there an alternative?

Yes! That is Debt mutual fund. They invest mainly in debt or fixed income securities such as corporate bonds, government securities that have various time horizons. The benefits of having Debt Mutual Funds are:

  • Unaffected by market volatility
  • Provides stability
  • Tax deductions
  • Highly liquid

To get access to Debt Mutual fund, MyWay Wealth is one top destination.

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Let’s talk on “Gold” as an Investment Option

We find that money kept in a bank is eroded by inflation. In order to mitigate risk and inflation, we started buying gold. Gold is treated as a weapon to fight inflation which means that- as the prices of gold rises, your money will not lose it’s purchasing power.

Can you make profits in gold?

You make a profit in gold- when there is a rise in prices. Adding on- profits you make will also depend on when you bought it and how long you held it for. Suppose you purchased gold

  •  3 years ago- you would have earned 2-3% returns.
  • 5 years ago- you would have got your investment back with zero returns.
  • 10 years ago- you would have earned 9-10% returns.

Thus, if you buy Jewell thinking that you’re making an investment- this is how your returns will vary.

Gold Jewell as an investment option:

Every investment we make has a cost attached to it, which can be seen or unseen- like making chargers for gold jewelry. When you sell Jewell, you’ll lose 10-30% depending on the purity of gold and making charges. So, buying gold Jewell as an investment doesn’t make sense.

Options to buy Gold:

  • Gold coins and bars.
  • Gold ETFs (Exchange Traded Funds).
  • Bonds issued by Government.

A smart investment decision you can make is to buy gold bonds issued by the government which will not only give you full market value when to sell the product but also gives you 2.5%-4% of returns every year.

Thus, when you buy gold do buy it sensibly where not more than 5-10% of your portfolio goes to gold and do not buy Jewell as an investment.

Is there an alternative?

Digital gold is relatively very new to the market. It is very simple and transparent to buy and sell gold instantly. Physical gold has limitations on safety and security issues. But there is another gold investment option that overcomes all the challenges of holding physical gold and that option is “Digital Gold”.

Are you looking for the best platform to make a gold investment?, here are some of the features of 24K Gold on  MyWay Wealth,

  • You can buy 24k Gold and skip the responsibility of safe-keeping and traditional lockers.
  • You can get a free and secure locker from BRINK’s, a global leader in gold custodian services with 100% insurance cover.
  • Sell your gold with one click, anywhere and any time.
  • Get your gold delivered to your doorstep, hassle-free.

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Let’s talk on “Real Estate” as an investment option

Real Estate is a must-buy thing for people with investing in their minds. After gold, people are obsessed with Real Estate. It is a “chunky investment” with a huge cost attached to it.

Why “Real Estate” is not a good investment option?

  • It is very limpid- you can’t sell in a hurry. You have to sell the whole property at once.
  • A huge maintenance cost-  you will incur periodic expenses to maintain it.
  • The risk associated is very high because they do not come with any guaranteed returns.

Why do we like it so much?

There are mainly three reasons why people go for Real Estate:

  1. Habit
  2. Black money
  3. Fear

Habit:

we’ve heard stories about how the land in the village that cost just a few thousand is now valued at crores. The reason why people think real estate is a great investment because they just look into the returns ignoring the risk associated with it. The fact is that the time gap between selling and buying includes a maintenance cost, property taxes, brokerage, and insurance. The effective rate of return before considering these costs is what that matters to everyone. And again between the same time gap, a lot of things can happen and can go wrong as in like- the title can be disputed, the land can be grabbed, the tenant can create a problem.

Black Money:

The habit of black money is so strong that we can’t even imagine where a cash payment is an exception and full cheque is a norm. Unless you have illegal money stay away from real estate in India because the prices get inflated due to improper cash flow in the system and if corruption is cracked, you can’t see any price rise for decades.

Fear:

People always choose real estate just because- the fear of unknown investment options. Earlier they had only a few investment options- gold, real estate, bank deposits where everyone has chosen to invest in, but now the presence of many guaranteed return investment schemes are stopping them. This is because the stock market scams in the past are haunting them.

Thus, we should be careful about where we invest our money. Before making investment count the cost which you may incur and also decide upon the period- for how many years you want to hold a particular investment. To see the true face of your investment- you can even look at the post-tax returns which you earn.

Go for a real gain, not just for the gold!

Think MyWay Wealth!!!

You don’t have to be expert to Invest

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We hear people saying that- “I’m not an expert, I can’t invest in the market”. People fear to invest. They fear because of not being educated enough about the stock market and losing money scares a lot of people. At times you feel you’re too poor or too young or too dumb to begin. No matter what your age, stage or circumstances are, you need to start investing in the right way. You need to decide what is important, where to invest and find out the right way to raise money.

Reasons why people resist investing:

  1. Not having enough money to invest
  2. Their desire to keep money in liquid form for future emergencies.
  3. Fear of making mistakes in investments and losing money.
  4. Lack of knowledge in share markets.

Think…..

You can’t say that

Many will not begin the process of investing because they say that they don’t have enough money to make investments. We don’t need a large lump of money to invest. Your small savings can be bought up to make a large lump sum. Suppose if you begin with just Rs 1000 a month, it’s Rs 12000 in a year. Most people will be able to save anywhere between Rs 5000 to Rs 10000 a month. Now you have an answer for “where is the money to invest?”.

What if…

Yes, creating an emergency fund and buying insurance is very important which enables you to protect yourself from unseen happenings and reduce your financial damages. But do remember creating them will also reduce the need of having cash in hand. And this cash in hand can be a reason that people don’t invest for the long term.

I fear to make mistakes…

A lot of people manage to make investments in fixed deposits, real estate, life insurance, and gold even though they feel that these are high-cost investments that yield fewer returns. Always remember it’s better to have something in investment even if it earns less rather than having the one that earns you nothing.

Make some time to understand “finance”

“I don’t know anything about investing” is the most repetitive dialogue we hear from people. Remember, understanding the word “investing” is like “one-off” in terms of your time. Once you get it, nobody can take it away from you and once you understand the logic behind making in different securities, you will never get cheated by anyone.

How much money do I need to invest?

The next most asked question is “how much do I need to invest?”. All you need to do is to be wise by planning your investments and get suitable returns. It will depend on various factors like:

  • Why do you want to invest?
  • For how long you want to invest?
  • How comfortable are you in taking the risk to have higher returns?
  • How secure is your job?
  • What other financial products do you have already in your portfolio?
  • Are you an entrepreneur or a salaried employee?

Hence, these are the factors that influence your decision on “how much”. Every time you make an investment keep in mind that “your financial product should solve the problem that you are facing”.

Moving on…

Now, you are ready to make an investment in different investment products and it’s your turn to find out the product that suits you. Let’s create 3 different cells for your investments i.e., Almost there, In some time and Far away.

Basis Almost there In some time Far away
Span Any planned expenses that happen in 2-3 years Any planned expenses that will incur pen between 3-7 years Any planned expenses that are likely to occur in the distinct future
Need Sending kids to school, buying a car, buying a house. Kid’s higher education, Kid’s marriage. Retirement

 

Now you need to know “What amount you need to invest today?”. All you can do is just figure out all the expenses that you may incur and assume a certain rate of inflation to raise the cost. So, you know approximately how much you will need in the future. There are some online calculators available that will help you out.

Thus, start doing rather than waiting for a movement. Do remember you’re not a trader, you’re an investor. It is the role of the trader to speculate the market and as an investor, you make an investment. Look for a financial product that matches your financial need. Every product will have a certain lock-in period and has a time period where it works at its best.

Looking for the investment options – you can invest in MyWay Wealth. All you need to do is download the app, register & KYC (know your customer) and start investing a small amount every month, which is SIP (Systematic Investment Plan), with just Rs.100/-.
Sign Up on MyWay Wealth: Invest now

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Don’t Delay! Start investing today with MyWay Wealth.