Should I start investing in mutual funds? How do I know if it will be beneficial for me in the long run? Before investing, is there any way where I can get a roadmap of my investments? There are too many questions to address. So let’s dive into the reasons why investing in mutual funds serves to be beneficial and also answers the questions above.
- Generating wealth for the future:
You. Me. Every one of us has been given an earful on saving a dime for the future. So why not do it the right way? Mutual funds are favourable tools to start the onset of investing. When you begin to invest in mutual funds from an early age, you can literally end up with a bigger corpus. At an early age, you can afford to take higher or aggressive risks depending on your own risk tolerance levels. Hence you can pile up bigger investments to equity funds. Eventually, bigger slices of your savings can actually go into wealthy assets!
- Financial discipline:
Filling up the coin jar or rolling in notes into the savings box is just not enough to stabilize financial discipline. With mutual funds, you can invest in small amounts. SIP is the tool which comes in handy in building a habit of regular investing. You can invest as small as ₹100 and eventually help you come into a disciplinary habit for future savings.
- The rise in risk appetite:
They say an investor must risk as per his appetite. Bearing in mind the risk tolerance and the financial stability, one can realise which funds suit them best. One can always modify their plan of action and experiment for better return opportunities.
- Save some taxes: Today getting taxed on everything is common. You are taxed on your savings in fixed bank deposits, mutual funds, stocks and more. However mutual investment can help you save upto 1.5 lakh rupees under section 80C in the taxes by an equity-linked saving scheme or ELSS.
- Transparency: SEBI guidelines have made the investors distinguish the risk levels of all the mutual funds’ products. This helps investors understand the safety and risk involved before investing. Colour coding is helping to understand the risk levels. For example, the colour blue indicates low risk, yellow suggests medium risk and brown becomes the code for volatile and aggressive schemes.
- SIP calculator:
How can a SIP calculator help you with investments? A SIP calculator can give investors a good idea of the potential capital gains from their mutual fund investments made via a Systematic Investment Plan.Your monthly funding, along with your interaction rate is calculated to give you the estimated amount of returns for any particular tenure.
There are many other benefits of investing in mutual funds. You can start small to save big. Mutual funds help you keep an even uniformity of financial discipline and stability. Moreover, it’s an easy and convenient way to start your investment journey.