CAN YOU TAKE THE 50 BEFORE 40 CHALLENGE?

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    Mutual Fund

    For the vast majority of us, from the day we begin school, life is a series of challenges. It never stops challenging us. First, it is fetching good grades, then getting into goodgrad (and post-grad) colleges after school. Then, the challenge is to get a good, stable job. What’s more, it doesn’t end there, though. We then compete for better roles, designations and salaries. Next, we move on to the ultimate challenge of generating sufficient wealth to meet ourpresent and future needs, of both ourselves and our families.

    What milestones we achieve in life can often decide the success, or the lack of it, when it comes to meeting the ultimatum of producing “enough” wealth. One such milestone for many investors, especially those working in the metro cities with its associatedextravagant cost of living and probably better quality of life, is achieving their first crore.

    However, unlessyour income is growing at a very high rate, saving huge chunks of money is quite demanding. So why not begin with a significant but a slightly smaller goal? Also, while you are at it, why not make it a challenge to keep you motivated enough to achieve it?

    The challenge is to save at least Rs 50 Lakhs before you turn 40. No, you don’t have to be awfully young to reach this breakthrough. Even if you commence fromscratch, all you need is just about 108 months or around 9 years. How you ask? You can start by investing in mutual funds (mf) for beginners.

    Mf meaning – A mutual fund is a type of investment vehicle wherein several investors pool their money together to get it invested in different securities like stocks, bonds, money market instrument, etc. by a professional known as a fund manager.

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    Here’s a mutual fund investment guide about how you can achieve your goal:

    Step 1: Begin with saving at least Rs2000 a month

    Step 2: Opt for good equity mutual funds, if possible large-cap and diversified ones that invest in a good, reliable company. If you know mutual fund basics, you’drealise that all you are doing is creating a portfolio. Spread your investment across at least two to three funds.
    Pro-tip: Consult a qualified financial adviser or a professional to get a non-biased yet good recommendation about mutual funds.

    Step 3: Start an SIP (Systematic Investment Plan) in the selected funds for around 9 years

    Step 4: Step-up your SIP investment amount by 10 to 15% annually.

    Step 5: Stay strong and stay invested through these 9 years irrespective of the market volatility. If a mutual fund isn’tperforming well for too long, you might need to reconsider that fund, but stay invested in the equity asset class to let your capital grow at its maximum potential.

    This mutual fund guide will help you to meet your goals at the speculated period of time. If you are still unsure about how to invest in mutual funds for beginners, seek professional help. They’ll explain about mutual funds meaning and types, so you make an informed decision. Happy investing!