Cheat sheet to utilizing your bonus in the best way possible

It is that blessed time of the year when your salary account gets credited with a bit more than usual. But do you remember how long that feeling lasts? Probably you will feast yourself with a vacation or buy yourself a nice gadget. However, remember within a very short period of frivolous spending your extra income disappears. During this entire process, seldom is we think about ‘investing’. I will discuss a few pointers on how smartly you can use this money to make it work better for you:

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Build Wealth: Shubharambh

Everybody wants to build wealth but most people don’t know where to start. The best time to start building wealth is when you are earning. But as it sounds easy the process seems so daunting – saving money after all the expenses, planning how much to save, doing all the paperwork etc. All these tasks seem to be very difficult and hence we procrastinate.
The ultimate stepping stone towards building wealth should be kept now.

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A gift for retirement – National Pension Scheme

The average life expectancy has increased to 70 years, so a quick question went through my mind what if I have been gifted such a long life, shouldn’t I plan for a healthy and happy retirement? Shouldn’t I be prepared for the future?
I am pretty sure that this question might have crossed through your mind too. The answer for the same is National Pension Scheme.

What is NPS?

National Pension Scheme is a defined contribution-based Pension Scheme launched by Government of India. NPS is regulated by Pension Fund Regulatory Authority of India (PFRDA). It is a voluntary scheme for old age security.

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mutual funds

Aren’t Mutual Funds Risky?

Although Mutual funds are regulated by the Securities and Exchange Board (SEBI) of India,  people are skeptical of investing their money in Mutual Funds. The reason for this phenomenon is “Safety of your investments”. Since Mutual Funds are linked to the market, investors doubt the safety of their funds and the guarantee of their returns. This article addresses the concern and lists out reasons to prove that investments in Mutual Funds are safe even though they are risky:

Regulated

As stated before, SEBI regulates Mutual Funds with the intention to protect the interests of the investors. SEBI sets guidelines that help investors in comparing various funds and also have categorized Mutual Funds into – Equity, Debt, Hybrid, Solution Oriented, and Others. This makes the entire system simplified and uniform.

Diversification

Mutual funds have definitely capitalized on the quote “Don’t put all your eggs in the same basket”. Mutual funds wisely invest your funds in various instruments such as stocks, bonds, company shares, etc. Thus reducing the risk that could arise from investing in a single stock.

Reduces Risk

Mutual Funds are managed by Professional Fund Managers. They make decisions regarding the buying and selling of funds based on research and abide by the standards set by SEBI. They constantly evaluate the investments and address risk by diversifying asset portfolios.

Inflation-beating returns.

Mutual Funds account for inflation. The inflation rate in India has been between 4% – 7% and with Mutual Funds, investors have the potential to earn more than 15% in returns, which easily beats inflation. Thus the real interest rate (i.e. nominal interest rate – inflation i.e. 15% – 7%) is more in Mutual Funds when compared to FDs.

Flexibility   

Emergencies such as accidents or health issues are uninvited guests in anyone’s life. One way to face them is to be able to access your money easily. With Mutual Funds, you can withdraw your funds anytime and the amount gets credited to your bank account. Also with MyWay Wealth, you can invest for a specific goal (retirement, child’s education/ marriage, vacation) or just park your money aside with 3-year investments.

A fund for every investor.

Investment decisions have to be made based on the investor’s risk appetite & investment horizon and with Mutual Funds that is possible. Mutual Funds provide tailor-made funds that suit your financial needs. Right from short term funds to long term funds, Equity Funds (High risk, high returns) to Debt Funds (low or moderate risk and returns), you can find them all under one roof of Mutual Funds.

“Everything you want is on the other side of fear” Jack Canfield

Now that we know Mutual Funds are not as risky as they seem to be, let’s overcome the fear. Don’t Delay – Invest Today!

Gold funds

Make wiser investments in Gold

 

“Gold has two significant shortcomings, being neither of much use nor procreative”
-Warren Buffett

One of the most prominent investors of our time, Warren Buffett is known for his advice on investments is telling people to trade in anything but “gold”. However, we Indians love gold and just cannot let it go. It would be hard to find a person who has not invested in gold in one form or another. There are those who buy gold jewelry for different occasions like weddings, festivals, etc., while others look to make a profit.
“Gold is not an investment at all!” said the Vanguard founder and former CEO, John Bogle in an interview with CNN. “Gold is speculation. It has absolutely no underlying intrinsic value,” said the American investor, who is known for promoting Mutual Funds. An investment that only recently became popular among the average investor for its low-cost and high earning schemes.
Did you know that you can invest in gold through Mutual Funds? This investment vehicle collects the money and invests in physical gold without the hassles of storage and low yield. There are two ways you can go about it. One is to invest Gold Exchange Traded Fund (ETF) and the other is to simply invest in Gold Funds. Let’s see how they differ from each other :

 

Gold ETF

Gold Fund

  • Investor trades in the physical gold through an exchange.
  • A Mutual Fund scheme which invests on the Gold ETF and other related assets.
  • Can be purchased from the stock exchange and requires a Demat account.
  • Can be purchased in Mutual Funds without a Demat account.
  • Gold ETFs are priced transparently based on international gold prices.
  • Gold Funds invest in Gold ETFs and other related assets, their NAVs are dependent on gold prices as well as prices of other assets that funds hold.
  • Gold ETFs typically require a minimum investment amount of 1gm gold which is close to Rs 3,000 at current prices.
  • Gold Funds allow a minimum investment of Rs 1,000 (as monthly SIP).

 

If you were determined to purchase gold, do so with the better investment vehicle. Since Gold Funds are professionally managed, they are preferred over physical gold, even though it holds less liquidity. Using the MyWay Wealth App, any person can trade in these funds with his specific appetite of risk. Explore More on Top Rated Gold Funds

So go for the real gain, not just for the gold!
Think MyWay Wealth!

MyWay Wealth Weekly Update (Issue #13): Fresh perspectives to regular decisions & more!

At the very outset, wish you a very prosperous 2019.

Last year has been quite eventful with many not-so-pretty events unfurling. However, the good news is that Indian equities continued to remain wealth creators. While 2017 was extraordinary and 2018 delivered relatively low, Nifty still managed to deliver an annualised 15.4% in the past two years.

For those of you bored of the routine, here’s a short video that sums up 2018 and our hopes for 2019 in a manner much more fun than you would have ever seen – Click Here.

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Gold or Mutual Funds?

Gold or Mutual Funds?

As women, we love to show off our gold jewelry as they define our social status, lifestyle and earning capacity. Weddings, anniversaries or Akshaya Tritiya, we rush to get our favorite ornament made of gold.
We hear our moms and grandmoms say, “Buy Gold, it would help when you are in need of money”. Meaning, traditionally Gold is not just a piece of jewelry but is considered as an investment.
Then why does the business magnate, Warren Buffett, does not invest in Gold?
He says: “It doesn’t do anything but sit there and look at you.”

Do investments in Mutual Funds fetch better returns? But do I choose Mutual Funds or Gold?
Let me list down the differences between the two, this will help you to make the right choice.

Investment in Gold

Investment in Mutual Funds

  • Gold is not affected by market conditions.
  • The process of investing gold and managing investments is an individual’s responsibility.
  • Fear of theft or loss of purity is more as Gold is a physical asset.
  • Diversification can happen only if one chooses to invest not just in Gold, but in silver, or other mining products.
  • Value of Gold is more hence the amount you invest in Gold would naturally be high.
  • Gold remains to have the same value unless someone buys it at a higher price.
  • Gold incurs making charges and wastage
  • Mutual funds are affected by market conditions so there is potential to earn higher returns.
  • Mutual Funds are handled by Professional Fund Managers who perform research and guide your investments in Mutual Funds.
  • Mutual funds are invested in stocks, bonds, or Gold ETFs, they are electronic or online investments.
  • Mutual funds provide the option of diversification as it allows investment in bonds, cash, or commodities like gold and other precious metals.
  • Initial Investment in Mutual Funds can be as small as Rs. 500 Read More: Let your money grow
  • Investments in Mutual Funds earn high returns as time passes. Mutual Funds Providing >15% returns.
  • Mutual Funds have no such charges, in fact, investment in Direct Mutual Funds don’t even have commission charges.

Does this mean I cannot invest in Gold? No, they are better ways to invest in Gold.

Yes, MyWay Wealth, India’s most trusted app for Direct Plan Mutual Funds, allows you to invest in Gold through Digital Gold – 24K Gold, where:

  • You can buy the desired quantity or amount of gold above Rs. 1000 and purchase it at the live price quoted.
  • Track your gold value & transactions anytime from your gold tracker.
  • Sell any amount of gold above Rs. 1 & get the amount credited in your bank account within 72 hours.
  • Get gold coins/bars delivered to your doorstep when you have more than 1gms of Digital Gold.

 

Start Investing in MyWay Wealth

Mutual Funds

Basics of Mutual Funds

Investments and returns are two sides of the same coin. The primary goal of your investments is to earn substantial returns and one such instrument that helps you with that is Mutual Funds. A Mutual Fund invests money in various financial instruments such as stocks, bonds, company shares, etc, by pooling in money from several investors. The money collected is managed by an Asset Management Company (AMC) and the person who drives this investment vehicle is a Fund Manager.

Mutual Funds comes with two plans – Direct and Regular plans. The major difference between these two plans is that with Direct Plans an investor buys Mutual Funds directly from an Asset Management Company (AMC) and with Regular Plans an investor does the same through an intermediary (broker, advisor or distributor). Now, the question is why do you buy Regular plans when the same can be bought directly? With Direct Plans you get to earn 0.5% – 1.5% more returns than Regular Plans because:

  • Expense Ratio – The Expense involved in a Direct Plan is lower. Unlike Regular plans, Direct Plans do not involve commissions that are to be paid to intermediaries.
  • Returns – Since they have a lower expense ratio, Direct Plans provide higher returns.

So why miss out on Higher Returns? If you have invested in Regular Plans, it’s highly recommended that you quickly switch to Direct plans.

Speaking of returns, Mutual Funds are risky because they are linked to market conditions, but due to high risk, they also provide higher returns (returns more than traditional instruments such as FDs, RDs or PPF). The current interest rate for Fixed Deposits is anywhere between 4% – 8.5% but with Mutual Funds, an investor has the potential to earn returns of 15% or more.

Inflation is yet another important factor to be considered when it comes to investment and Mutual Funds account for it. The inflation rate in India for the past 10 years has been between 4% – 7%, which means that the returns earned minus inflation are higher when it comes to Mutual Funds when compared to FDs.

Now that we know Mutual Funds are the best option for investment, the often debated question is whether to invest in small amounts (SIPs) or lump sum in Mutual Funds. Systematic Investment Plans (SIPs) are a way of investing a fixed amount in a monthly/quarterly basis, whereas lump sum is a one-time investment in Mutual Funds. However, SIPs are more beneficial than a lump sum, let’s find out why?

  • Systematic – SIPs inculcate the habit of savings by investing a fixed amount at regular intervals.
  • Less Risky – With SIPs the money is spread over various intervals of time. This reduces your risk and protects your investment during times of market volatility.
  • Rupee Cost Averaging – With SIPs you get the opportunity to hold more units. With SIPs the money is distributed during different phases in the market which means when the market is low, you get to buy more units. This gives the opportunity to sell high when the market is favorable.

“Risk comes from not knowing what you are doing.Warren Buffett

Now that you know everything about Mutual Funds, then what are you waiting for? Start investing with MyWay Wealth! You can start a SIP with just Rs. 500 in Direct Plan Mutual Funds today. 

Other Schemes – SEBI Classification

Other schemes- SEBI Classification

Other schemes- SEBI Classification

Other schemes as per SEBI Classification include:

  • Index Funds/ ETFs

These funds invest 95% of the investment corpus in securities belonging to a particular index which defines a market segment, like in bond or equity-oriented instruments like stocks. The famous stock indices in India are BSE Sensex and NSE Nifty. If you are looking for low or moderate risk instruments with predictable returns then, Index Fund/ ETFs is your ideal option. The top-performing Index Funds include: (more…)

Solution-Oriented Mutual Fund Schemes based on SEBI Classification

Solution Oriented Schemes

Solution Oriented Schemes

The various investors in the market invest for different reasons. Some invest to make high returns and some invest to perform speculation in the market. However, there are some investors who invest for particular goals such as: setting aside funds for retirement, education or marriage for their children. At times, such investors are unaware of investment management or the selection of funds. In situations like these, it’s recommended to opt for Solution-Oriented schemes that provide attractive returns by investing in them for a lock-in period of 5 years. As per SEBI, there are two categories of Solution-Oriented Schemes, namely:

  1. Retirement Fund: These schemes have a lock-in period of 5 years or till the retirement age (whichever is earlier).
  2. Children’s Fund: These schemes have a lock-in period of 5 years or Till the child turns 18 years(whichever is earlier).

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