How Mutual Fund Investments Can Help Power Your Financial Freedom

The word “Mutual Fund” may not be an alien term, but the concept of mutual fund investment is definitely unclear to many. Mutual funds are the fastest way to accumulate wealth, yet many people are skeptical about investing in it. Traditionally, people are more inclined towards investments that give them fixed returns and capital protection, which is possible in case of bank investments like RD and FD.

Mutual funds, however, fail to generate the same trust among people. They think mutual fund investments are very risky, but what they don’t realize is that they have the complete freedom to choose the level of risk they are willing to take. Moreover, all mutual funds are registered with the Securities Exchange Board of India (SEBI), which makes your investments safe and secure.

Why Isn’t Regular Savings Enough?

Having financial freedom is an important milestone of adulthood. With financial freedom, you can live life on your own terms and shape a better future for yourself and your family. If you wait to save up money for the future through regular bank investments, it might take you eons to reach the targeted amount. Also, if you have the dream of owning your own house or car, you have to save money for them as well. In short, regular bank savings with just 6%-8% interest rates are not going to help you achieve your dreams easily. This is why you should consider mutual fund investments. 

Why is Mutual Fund Investment a Wise Decision?

  • Mutual fund investments are ideal for people with zero knowledge on the stock market as investment experts manage these types of funds. The experts pool money from investors like you and invest them in diversified stocks.
  • There’s no need to think twice before investing in mutual funds as they are based on the principle of compounding. Whatever interest is earned on the principal amount gets added to the principal amount and the interest is calculated on the entire amount.
  • There are different types of mutual fund investment schemes that give you the flexibility to choose your investment approach, amount, duration and the level of risk you want to take.
  • With FD and RD, you need to save money for a specific duration to meet the targeted amount, but mutual funds are flexible enough to be liquidated as and when you want. As soon as you sell your mutual funds, you get the money back to your account.
  • With SIP (Systematic Investment Plan), mutual funds allow you to contribute as low as INR 500/- per month.
  • With mutual fund investments like ELSS, you can enjoy the benefits of tax deduction under Section 80C as well. 

Things to Consider As a First-Time Investor

Fix an investment goal

Decide your investment goal before you invest in mutual funds. Consider the target amount, time duration, and risk appetite before you start. 

Choose the right fund type

Choose from different types of mutual funds according to your goal and budget. For first time investors, a balanced or a debt fund investment would be favorable considering the low risk associated with them despite higher returns.

Diversify the portfolio

Consider investing in more than one mutual fund scheme. By investing in diverse funds, you can minimize the market risk. As one fund under performs, other funds can make up for it.

Go for SIP investments instead of a lump sum

SIP investment allows you to invest a fixed amount of money over time instead of putting a large amount in the market and becoming susceptible to market risks.

Keep your KYC and Net Banking Account Ready

Unless you are KYC compliant, you won’t be allowed to make investments. For it, you need to provide a valid PAN card with address proof. It is also safer to have a net banking account to invest in mutual funds instead of investing through cheques and debit cards.

Seek a mutual fund expert advice

Mutual fund investment requires constant monitoring and updated knowledge on the market behavior, which is something only experts can provide you with. If you are investing for the very first time, seek the help of a mutual fund expert.

How to Invest in Mutual Funds for Financial Freedom?

The dream of buying a new home or car, or going on the first international trip, or getting married are some common dreams that most people share. To fulfill these dreams in your youth, you need financial freedom which your regular bank savings won’t be able to offer. To accomplish your goals on time, you must consider a mutual fund investment as your best friend.

Websites like Goal wise, are helping people enjoy their financial freedom by letting them select their investment goal on their platform and suggesting the best type of investment plans according to it. When you plan your investment goal with them, you get:

  • Suggestions for the best mutual fund according to your target.
  • Automatic switching of mutual funds to better ones every year as per the market value.
  • Automatic low-risk investments as you reach close to your goal.
  • Regular notification for your investment progress.

Along with this, you can also enjoy a number of free features and facilities on the website to reach your financial goals. Facilities like SIP calculators, lump-sum calculators, tax tools, retirement tools, and LIC cover calculator are some benefits that people of all ages can enjoy. You can also schedule a free call with Goalwise’s SEBI Registered Investment Advisors (RIA) for answers to all your investment-related queries.

Start your mutual fund investment today; the earlier you invest, the better will be your returns. Younger people who invest in mutual funds become more responsible about finances and develop better spending habits as well. Young age also gives you the opportunity to take more risks as you get enough time to recover your losses by the time you reach your retirement age. You’ll also be able to accomplish your dream of owning big assets or meeting life goals easily with mutual fund investments, without the need to borrow loans or worry about repayments.

I am a blogger and have 10 years’ experience in marketing and my core focus is to build my authority as a blogger and I am doing this by writing actionable, useful and engaging contents.