Mutual Funds- The Quickest Way to Get Rich With Them In 2021

If you are looking to invest your money, no matter how little, have you considered Mutual Funds yet? Read on to know more about Mutual Funds. 

But first, What are Mutual Funds?

It is an investment pool that involves many investors with common financial goals pooling their money to earn returns on their capital over a period of time. The Investors buy shares in the mutual funds. Each share represents their contribution and ownership to the funds.  The funds are managed by a professional in the field known as the fund manager or the portfolio manager.

Money and gift | Mutual Funds- The Quickest Way to Get Rich With Them In 2021 | www.koushikketharam.com

It is their job to invest the pooled money in the different securities such as bonds, stocks, gold, and other assets in order to provide the investors with good returns.

The portfolio is structured and maintained in a way that the investment objectives stated in the prospectus are met.   Since the money pooled belongs to various investors, the profits and losses are shared by them in the proportion of their contribution to the funds. The people who don’t generally invest huge amounts go for mutual funds.

Another point to note is that they charge annual fees called expense ratios and, in some cases, commissions, which can affect their overall returns.

With so many Investment options available, if you are wondering why only Mutual Funds, here are the reasons you should look into Mutual Funds-

Diversification in Investment-
Money in hand vector graphic | Mutual Funds- The Quickest Way to Get Rich With Them In 2021 | www.koushikketharam.com

This is one of the biggest advantages you have in a Mutual Fund. Diversification means investments in various assets. It helps you in creating an assorted portfolio. This way, money is invested in various assets according to the investor’s risk appetite.

This also lowers the risk you hold since the investment is in different places. With diversification, the risk associated with one asset class is countered by the others. This way, you don’t lose out on the entire value of your investment if a particular component of your portfolio goes through a turbulent period. 

Professional Management-

As mentioned earlier, all the money pooled is managed by a professional in the field known as the fund manager or portfolio manager. This helps the investors who do not have the time and the bandwidth to research each stock and then purchase it.

This is where professional help will come in handy to you. Your fund manager will continuously monitor your funds and invest accordingly to meet your financial goal. This is one of the most advantageous things about investing in Mutual Funds. 

High Liquidity-
growth | Mutual Funds- The Quickest Way to Get Rich With Them In 2021 | www.koushikketharam.com

Mutual Funds can be easily sold to meet your financial needs. Once liquified, you will receive the money through your bank account in a span of a few days. Apart from this, there are Mutual Funds that provide faster disbursal.

They are called funds having an instant redemption facility, wherein the money is transferred to your bank on the same day of the liquidation itself. 

Higher Returns on Investment-
Investment image | Mutual Funds- The Quickest Way to Get Rich With Them In 2021 | www.koushikketharam.com

Mutual Funds are one of the best ways you can beat inflation. Every investor investing in Mutual Funds aims to achieve higher returns and increase their wealth.

They have greater prospects of potentially providing high returns over time as one can invest in a diverse range of sectors and industries.

As explained earlier, this diversification helps in covering the losses and reducing the risk and also increases your profit. 

Easy to manage-

Investing in these funds is a lot easier than you know. You can go about it Offline or online as per your preference and convenience. You just need to submit the necessary documentation and it is easy from then on. This ease of investment is due to one other major reason that is the good regulation of Mutual Funds.

All mutual funds are regulated by the capital markets watchdog Securities and Exchange Board of India (SEBI). This means that all mutual fund houses are required to follow the various mandates as laid down by SEBI. This, in turn, protects the interests of the investors. Moreover, SEBI makes it mandatory for all mutual funds to disclose their portfolios every month.

As a first-timer in Mutual Funds, here are some of the things you should consider before investing-

  1. Have a Financial Goal
  2. Do your homework in choosing the policy as this has a lot of impact
  3. Returns are no guarantee
  4. Consult the experts in the field
  5. Try SIP instead of investing lump sum amount at once

With this being established, the next question is how. How to go about investing in Mutual Funds. Read on to know about How to Invest in Mutual Funds. 

Man walking up the stairs | Mutual Funds- The Quickest Way to Get Rich With Them In 2021 | www.koushikketharam.com
  1. The first and the foremost step in any kind of investment is to know your “WHY”. Know why you want to invest in mutual funds and what do you expect in the returns. 
  2. Fulfil all your KYC needs. KYC is Know Your Customer. For this you need your  PAN card, proof of residence, age proof, etc as specified in the guidelines. 
  3. Know about your options. The market is flooded with so many Mutual Funds schemes. Research properly and invest your money in the one suiting your needs and expectations. After getting to know your options, have a look at your risk appetite and consider the risk you can take before investing. 

Here are the ways you can invest in Mutual Funds-

  1. Offline investment directly with the fund house
  2. Offline investment through a broker
  3. Online through the official website
  4. Through an app

Conclusion

If you want to inculcate the habit of disciplined investment, it is best if you start with low costs. Mutual Funds are one of the simplest and easiest ways for low-cost investments. Now that you know about Mutual Funds, it’s benefits, how to go about it, etc, start investing in Mutual Funds and see the growth for yourself. 

Leave a Comment

Your email address will not be published. Required fields are marked *