How to Earn Money from Mutual Funds
Mutual Funds have been everyone’s favorite investment nowadays. But, to gain from it you need a right strategy. In this article, you will know how to earn money from mutual funds.
You know, just investing won’t make you rich, investing the right way will !!
This starts when you plan it today. You consciously decide how much you need today to meet your expenses and how much you can save easily.
Instead of wasting your savings on unnecessary things you should invest it in the right manner. In this way, with correct planning and budgeting, you not only meet your current expenses easily, but also create wealth to secure your future.
This way, money will help you to make more money. And, investing can help you to grow and multiply your money.
Get started with Mutual Funds
Now, when you do not have the knowledge of stocks, bonds, gold etc and also do not have much time to understand the market, then the best option to get started is mutual funds.
Whenever you hear the word mutual funds, the line instantly pops into your mind, “mutual funds are subject to market risks”. Now, there are thousands of mutual fund schemes which have different risk appetites. There are high, moderate and low risk funds, from which investors can choose according to their risk appetite.
Mutual Funds are managed professionally by experienced fund managers backed by a powerful research team. They take care of your money in a very professional manner.
Now, the question comes to how we can earn money through mutual funds.
To start investment in mutual funds, first you need to define your goals with respect to the time period under which you need to achieve them.
You can classify your goal into :
- Short term (that you want to achieve in 1 to 3 years – like child’s admission, planning for foreign trip etc),
- Mid term (which you want to achieve in 3 to 5 years – like saving for marriage, or building house, or buying a car etc)
- Long term (which you want to achieve in more than 5 to 10 years – like planning for retirement, wealth creation etc)
According to your goals, you can invest in different mutual funds.
Types of Mutual Funds
Majorly, mutual funds are classified into 3 categories – Equity, Debt and Hybrid Mutual Funds.
Equity Mutual funds invest in stocks and give good returns in the long term. So, for meeting your long term goals you can invest in equity mutual funds. They also give protection against inflation.
Debt mutual funds invest in government bonds and securities where your principal amount remains safe and gives returns which are higher than FDs. They are good for meeting short term goals where you need to withdraw money in a short time.
Hybrid mutual funds, on the other hand, invests in both equity and debt in the ratio which may vary from 60 to 40. For your mid term goals, you can choose to invest in Hybrid funds, as they give good returns in mid term.
In this way, when you choose the right fund for your goals, then you can make money and meet your goals within the desired time frame.
To know which mutual funds are best for you, book a free consultation with us. Contact us now.