Be a millionaire through mutual fund investing

Everyone aspires to lead a lavish life. You might have imagined of times when there would be no worries and you could live like kings. Imaginations are free of cost, and thus one is free to daydream about anything. But, to convert dreams into reality one has to go through tough phases of life as success does not have shortcuts. It is not possible to bank money only through earning, one needs to multiply what he/she receives. Thus, people like Mr N. R. Narayana Murthy, who started business with mere Rs. 10,000, and now owning an empire of Rs. 721.2 billion. It is no a magic but the result of correct investment at the precise time. So, if planned properly and followed correctly small sum of money can do miracles.Everyone cannot own a business empire but can invest in order to fulfill the future requirements and plan for the unforeseen. Mutual fund is one such platform that enables the clients to make a money tree out of the invested amount. Since the year 1963, when the first financial institution (UTI) took shape, the investment industry has changed drastically. Initially the mutual fund industry was a monopoly of the Unit Trust of India for about 24 years. But, gradually with the liberalization policy SBI and other PSU banks entered in the competition.

What is a mutual fund?People in India, who want to multiply their money fast, and through legal means end up investing in the stock market. The capital market is no doubt a good option to invest your money, but there is a darker side to it. The clients who invest in stocks of the listed companies are often unable to speculate the market conditions and thus tend to opt for inept stocks hereby increasing the personal liability manifolds. The mutual fund gives its clients a better way to invest in the equity market and many other investing avenues through a shielded manner. The meaning of mutual fund is evident from the name itself. It is a scheme under which the money from various investors, who have same investing strategies, is pooled up and reinvested to generate the profit accordingly. Therefore, mutual fund follows a concept similar to the cooperatives, i.e., combining the yield to maximize profit.

Mutual fund and the need of Asset Management Companies:-Cooperatives are formed and run by people themselves. But, in mutual fund such a thing is not possible because the entire investing process requires expert assistance. Hence, there is a need of an intermediary body which could facilitate the clients to understand and adopt a correct strategy of investment. Asset Management Company or AMC is an enterprise that acts on behalf of the investors to make the most out of their contributed sum. In layman terms, AMC is a medium that eases the investment process along with reducing the personal liability of the clients. Therefore, the customer’s risk is limited only to the amount which he/she invests in any of the mutual fund scheme and not any further.

Investing methodologies dispensed by mutual funds:-Mutual funds in India helps the clients to safely invest their money in the variegated schemes available. In addition to the secure investment, the mutual fund provides two ways through which the customers can achieve their targeted corpus viz, SIP and lump sum. Both are the ways through which one can invest in any of the schemes provided by the mutual fund companies. The clients must keep in mind that both the methods are not an investment mechanism in itself. It is just a path which leads to the ultimate goal of investing. SIP or systematic investment plan on one hand is the method through which the clients can invest a fixed amount over an extended period of time regularly. Investment through SIP is best-suited for the customers who follow a budgeted approach in their income and expenditure cycle. It inseminates the habit of regularized investing among the clients while on the other hand lump sum provides an avenue to invest via single premium in any of the mutual fund policies. It is best suited for the clients whose monthly income fluctuates a lot and they can afford to pay an enormous amount in a single go.

Making all investors happy:-Different people have varying investment requirements thus they aspire for schemes that coincide with their investing wants. The financial experts also felt that one single plan cannot fulfill the investment needs of all the clients. So, they devised a mixed bag of schemes which included equity-oriented, hybrid and debt funds. These three are the main categories of mutual funds. There are various sub-categories like diversified equity, ultra short term debt, balanced funds and many more. A client can choose from the list and invest accordingly. For example, a fresher in job can invest in any of the equity oriented schemes as there is a scope of expanding the income and he can take the risk.

Thus, mutual fund facilitates the clients to make use of their money in an efficient and secured way.

Mutual Fund is a tool through which the clients can enjoy a hassle-free investing experience. Along with providing a safe environment of investing the mutual fund investment has launched the online investment facility. The online method aids the clients to make investment sitting in their comfort zone. With the various areas available for multiplying the client’s money, mutual fund is growing fast to become one of the most trusted mechanisms for investment.

Dishika is well-versed with the ups and downs of the financial market and has published articles on mutual fund and SIP. She is associated with MySIPonline.com, which is an AMFI registered mutual fund company.