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Is an SIP 100% Safe: Facts & Insights

Is an SIP 100% Safe: Facts & Insights

Investing in the financial markets can be a daunting task, especially for those seeking stability and security in their investment choices. One popular investment option that often garners attention is the Systematic Investment Plan (SIP). SIPs allow investors to invest a fixed amount of money at regular intervals in various avenues such as mutual funds, trading accounts, or retirement accounts.  While SIPs offer numerous advantages, it is crucial to delve into their safety aspect to gain a comprehensive understanding. In this article, we will explore the safety of SIPs, analyzing the potential risks and benefits they entail. This will enable you to make well-informed investment decisions with a thorough understanding of the factors at play. https://www.youtube.com/watch?v=wEA3dKj7q5U Understanding SIPs and Dollar-Cost Averaging SIPs are a form of passive investment strategy that utilizes the concept of dollar-cost averaging (DCA). DCA is a technique where investors make periodic equal transfers of funds, ensuring they accumulate assets over time. By investing a fixed amount regularly, regardless of market conditions, investors benefit from averaging the purchase cost of units, thereby reducing the impact of market volatility. This approach is particularly advantageous for long-term investments as it allows investors to ride out short-term market fluctuations and make consistent investments without being influenced by market timing. Invest in Mutual Funds Market Risks and Returns While SIPs provide a disciplined approach to investing, it is important to recognize that they are not immune to market risks. Mutual funds, which are commonly associated with SIPs, are subject to market conditions, and their value can fluctuate. Therefore, the returns on SIP investments are not guaranteed. The value of mutual funds can go up or down depending on the market conditions, and investors may lose money if they redeem their units at a lower price than the purchase price. It is crucial for investors to be aware of the inherent risks associated with the market and approach SIPs with a long-term investment horizon to potentially mitigate the impact of short-term market fluctuations. Calculate SIP Returns Long-Term Perspective and Compounding Benefits SIPs are best suited for individuals with a long-term investment horizon. The power of compounding works in favor of those who stay invested for an extended period. Compounding refers to the ability of an investment to generate earnings on both the principal amount and accumulated returns. By staying invested for at least 5-7 years, investors can harness the full potential of compounding, allowing their investments to grow significantly over time. This long-term perspective helps investors overcome short-term market volatility and allows them to reap the benefits of gradual wealth accumulation through the compounding effect. https://www.youtube.com/watch?v=BIRf2Dm1wB8 Wealth Accumulation and Reconsidering Investment Plans As investors accumulate wealth through their SIPs, it becomes essential to periodically assess their investment plans. Reaching certain milestones or nearing retirement may prompt a reevaluation of investment strategies. While SIPs offer a passive approach, some investors might consider transitioning to actively managed investments at a certain point. Active management involves a more hands-on approach by investment professionals who aim to generate higher returns by actively adjusting investment allocations based on market conditions and opportunities. This transition can provide investors with the potential to further grow their wealth and achieve their financial goals. Conclusion SIPs serve as an excellent investment option for those seeking a disciplined approach to wealth accumulation. However, it is crucial to understand that SIPs are not entirely risk-free. The potential market risks and fluctuating returns make it essential for investors to adopt a long-term perspective and remain invested for extended periods to reap the benefits of compounding.  Monitoring the wealth accumulated through SIPs and periodically reevaluating investment plans can help investors make informed decisions to maximize their returns. By combining a comprehensive understanding of SIPs with diligent research and risk management, investors can navigate the financial markets more confidently and potentially achieve their financial goals. Remember, investing always carries inherent risks, and consulting with a financial advisor or professional is advised before making any investment decisions. Talk To An Expert
Smart Investments for Kids of 10-15 Years: A Parent’s Guide

Smart Investments for Kids of 10-15 Years: A Parent’s Guide

Time slips through our fingers like grains of sand. In the blink of an eye, days turn into years. Parents cherish the childhood of their children. But as said, we don’t realize how time passes. Kids grow up, and as they grow up, the expenses also increase especially the education-related costs. And if you have a kid between the ages of 10-15 years, you will have to prepare for your child's college. The post-graduation is in the line. In this article, we will guide you on preparing for these expenses.  If you have a kid between the age group of 10-15 years, his/her college will be due in the next 3-5 years. Apart from that, there may be expenses such as application fees, expenditures on electronic gadgets like laptops or tablets, etc. There will be living expenses that you will have to incur. And after 6-8 years, you might have to incur the expenditure for post-graduation.   https://www.youtube.com/watch?v=tdwqQH0xkFw Education inflation comes under the top category, i.e., one of the highest among all the categories. Adding to the burden, if your child plans to go abroad, rupee depreciation increases your cost.  The only way to prepare for this expenditure and save your child's future is to start investing. As the Chinese proverb says, "The best time to plant a tree was 20 years ago; the second-best time is now." Similarly, it would help if you had started the investing journey much before. But if you have not, then do not waste your time. Start investing right now. Something is better than nothing. But how to do that? Let us see.  First, you need to identify the expenses you will incur along with their expected timing. As mentioned earlier, these can be graduation expenses, living expenses, etc. Using the college cost calculator, you can approximately estimate how much it will cost in the future to pursue the desired course for your child.   To estimate the other expenses, you can take the help of our SIP calculator by using which you can estimate how much you will be required to pay in the future and the required amount to invest monthly to reach your goal in the future by considering the inflation.   After identifying the expenses and their timing, you should bifurcate them as per the estimated timing of those expenses, like expenditure to be incurred within a year, in 1-3 years, after three years, etc. This bifurcation will help you determine how much risk you can take while investing. It is considered that an investor can take a higher risk while investing for the long term, and the risk appetite reduces as the time horizon decreases. There is a simple reason behind this. A long-term time horizon allows you to recover in case anything goes wrong.  The only thing that remains is to start investing as per your risk appetite. But how to select funds? As said earlier, you need to determine your risk appetite, and accordingly, you can invest. You cannot take the risk aggressively for expenditure to be incurred within a year. So, debt funds such as liquid or money market funds should be considered. For expenditure to be incurred after one year but within three years, you can take a little more risk.   Hence, you can consider investing a small portion of your investments into equities. This can be better done by investing in hybrid funds such as conservative funds or balanced advantage funds. An aggressive investor can consider investing in multi-asset funds as they provide allocation to various asset classes such as equities, debt, gold, etc. And lastly, for expenditures to be incurred after three years, such as post-graduation expenses, you should consider investing in equity mutual funds. Equity mutual funds provide excellent growth potential with reduced volatility over the long term. Small cap, mid cap, flexi cap, or focused funds can be good options for investing for the long term.  This is how you can start investing in your child's education. However, you need to keep in mind a few points.   First, you need to monitor your portfolio regularly and rebalance it. As you come closer to your goal, you will have to reallocate your money from high-risk funds to low-risk funds.   Second, if your child wishes to go abroad for graduation or post-graduation, it will be better to invest in USD as your exchange rate risk mitigates automatically. The procedure to estimate the expenditure and amount of investment remains the same.   And lastly, if you are too late to start investing, you might be required to look for an education loan.   However, you should start investing even if you are late so that you can create at least some corpus for your child's education rather than nothing.           Hopefully, this article has given you some insights and helps you plan better for your child’s education. Start investing!  Talk To An Expert
HDFC Flexi Cap Fund

HDFC Flexi Cap Fund

Incorporated on December 10, 1999, HDFC Asset Management Company Ltd. is among India's most popular fund houses. HDFC Mutual Fund launched its first scheme in July 2000, and ever since it has been ambitious about offering a stable performance of funds across all the variants of schemes it offers. The HDFC Mutual Fund is managed by HDFC Asset Management Company (HDFC AMC) Limited.  Let us talk about the consumer product – HDFC Flexi Cap Fund  HDFC Flexi Cap Fund  Investment Objective The primary objective is to generate capital appreciation/income from a portfolio, predominantly invested in equity & equity-related instruments.   Investment Process  The fund follows the following approach to investing.  Focus on fundamentally strong companies with growth drivers in the medium to long term.  Focus on competitive position, corporate governance, and industry outlook.  Emphasis on valuation to assess risk-reward and provide a reasonable margin of safety.  A holistic approach to valuations without relying solely on traditional parameters like P/E or P/B.  Portfolio Composition  The fund had invested 90.85% of its assets in equity & equity-related stocks, 3.21% in real estate, and 5.94% in cash and cash equivalents. The significant sectoral exposure is to Banks, which account for roughly one-fourth of the portfolio. Note: Data as of June 30, 2023. Source: HDFC MF Top 5 Holdings  Name Weightage % ICICI Bank Ltd. 9.13 HDFC Bank Ltd. 5.62 State Bank of India Ltd. 5.28 Bharti Airtel Ltd. 4.71 Hindustan Aeronautics Ltd.  4.63 Note: Data as of June 30, 2023. Source: HDFC MF  Performance    This Fund S&P BSE 500 TRI Equity: Flexi Cap 1 Year 27.01% 18.66% 19.43% 3 Years 32.43% 24.46% 23.48% 5 Years 16.91% 13.71% 13.63% 10 Years 17.92% 15.33% 16.50% Note: Data as of June 30, 2023. Source: Value Research  Fund Manager  Ms. Roshi Jain (Since July 29, 2022) has over 17 years of experience in research and fund management. Before joining HDFC Asset Management Co Ltd in December 2021, she worked with Franklin Templeton India AMC Ltd. as a Vice President & Portfolio Manager. Ms Jain earned her Post Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad, in 2002. She earned her Chartered Accountancy from the Institute of Chartered Accountants of India in 1998 with an All-India Rank 2. She is also a Chartered Financial Analyst (CFA) charter holder.   Who Should Invest in HDFC Flexi Cap Fund?  The fund is suitable for investors willing to invest across market cap. However, investors need to understand the aggressive risk exposure of this fund.  Why Invest in this Fund?  The fund provides an opportunity to invest in companies of various market caps.  Aims to provide diversification to an investor’s overall equity mutual fund portfolio.  Experienced fund management and research teams with a track record of managing equity assets across market cycles.  Emphasis on risk management – portfolio diversification across stocks and sectors; focus on good quality businesses.  One of the largest funds in the flexi-cap category.  Ideal Time Horizon  One should look at investing for at least three years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The HDFC Flexi Cap Fund has a proven track record of over 25 years, with an Asset Under Management of ₹36,345.36 Cr as on June 30, 2023. The fund has consistently outperformed both the benchmarks and the category average also. Therefore, investors looking to generate wealth over the long term can consider this fund with an understanding of high risk. 
Smart Investments for Kids of 1-5 Years: A Parent's Guide

Smart Investments for Kids of 1-5 Years: A Parent's Guide

Parenthood is a beautiful journey full of smiles, joy, and love. Every child is a prince or princess for the parent. Like in any fairy tale, every parent wants their child to live the life of the prince or princess. In real life, royal life means sending your child to the best school, graduating from top-quality universities, going abroad, and settling anywhere in the world. And to achieve this, parents are ready to do anything. But come to reality. Inflation in education is among the highest. Another major obstacle is rupee depreciation if you want the child to go abroad for education. So how can a parent do all this? https://www.youtube.com/watch?v=tdwqQH0xkFw Well, every parent can fulfill all the dreams of the child. How?  The answer lies in investing.  Let us see how parents can save and invest for their children between the ages of 1-5.  Money grows with time. The earlier you start, the more advantage you have. A slight delay in investing can result in a considerable difference over the long term. Hence, it is advisable to start saving as soon as possible. "Start early and invest properly" is the appropriate approach every parent needs to follow to make their child's dreams a reality.  But how to invest for the kids in the age bracket 1-5?  Investing depends on the risk appetite of the investor. How much risk you can take will determine how you should invest. And the risk appetite depends on the time you have in your hand. The time when you require the money will determine your risk-taking ability.  Generally, it is considered that the more time you have in your hand, you can take a higher risk and vice versa. When investing for the long term, you can take the risk aggressively. As the time in hand reduces, your risk-taking ability reduces, and you need to reallocate your money to safer avenues.  This can be better understood with the help of the following example. Suppose your child is 1-2 years old. Let us first list down what expenses you will have to incur. It will be fees for kindergarten, school fees, graduation, post-graduation, electronics such as a tablet or a laptop, living expenses, and the list continues. Investment Options Under 10 Lakhs Read More You need to identify the expenses that will be incurred in less than one year, three years, 3- 5 years, and after that. After identifying the expenses, you can decide how much risk you can take.  For the expenditure to be incurred in less than a year, liquid funds can be considered. A gilt fund or corporate bond fund can be a good choice for expenses to be incurred after one year but within three years. One can consider even a conservative fund. Aggressive funds, balanced advantage funds, or multi-asset funds can be suitable in the case of 3-5 years. And for expenditures beyond five years, equity funds will be the best option. Small-cap funds, mid-cap funds, flexi-cap funds, focused funds, etc., generate good returns over the long term. However, as you come closer to your goals, you need to move the funds from high-risk to less-risky ones.  It should be noted that the allocation should be based on the risk-taking capacity of the individual investor. The above are general rules of thumb. One can choose to invest based on his or her risk appetite. E.g., an aggressive investor might consider investing in a balanced advantage fund for expenditure to be incurred within three years.  Generally, investing for kids between the age group of 1-5 gives the luxury of having an ample amount of time in hand. As said earlier, the sooner you start, the less you need to save, and it becomes easy to reach your goal. E.g., if you want Rs.10,00,000 after five years, you need to start a SIP of Rs.11,290 only assuming an expected rate of return of 15%. However, you need to save Rs.15,330 per month to reach the same goal if you delay your investments by one year. So, start investing as soon as possible. Talk To An Expert
UTI Equity Savings Fund

UTI Equity Savings Fund

UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes. Let us talk about the flagship product – UTI Equity Savings Fund.  https://www.youtube.com/watch?v=44SZNc03zBM UTI Equity Savings Fund  Investment Objective The investment objective of the Scheme is to provide capital appreciation and income distribution to the investors using arbitrage opportunities, investment in equity/equity-related instruments, and debt/money market instruments.   Investment Process   For Equity Investments: Sector selection combines top-down and bottom-up approaches going through short-term challenges and trading below long-term averages. Stock selection mainly involves Stocks trading at a deep discount to their intrinsic value and with signs of value unlocking. The focus lies mainly on stocks below their long-term averages or when it is cheap relative to market aggregates. Arbitrage opportunities arising out of mispricing in cash & future market. Opportunities that can provide regular accruals.  For Debt Investments: Debt portfolio is based on accrual strategy, focus on good credit quality, focus on low duration, tactical allocation on G-sec based on in-house view. Portfolio Composition  As a hybrid fund, the funds are allocated to equity, long-term debts, government securities, and non-current assets. The equity fund allocated 96.2% to large-cap funds, 3.8% to mid-cap. Note: Data as of 30th June 2023.Source: UTIMF Top 5 Active Stock Positions  Name Sector  % HDFC Bank Ltd. Banking 3.1% Infosys Ltd IT 2.9% ICICI Bank Ltd Banking 2.4% Larsen & Toubro Ltd Construction 2.1% ITC Ltd FMCG 1.9% Note: Data as of 30th June. 2023. Source: UTIMF  Performance Since Inception Note: Fund performance since launch; Inception Date – 30th Aug. 2018. Source: UTIMF Invest In Fund Fund Manager  Mr. V. Srivatsa is an Executive Vice President & Fund Manager –Equity at UTI AMC Ltd. He is a B. Com graduate, C.A., CWA, and has a PGDM from IIM, Indore. He has been with UTI AMC since 2002. Before joining UTI, he worked with Ford, Rhodes Parks & Co., Chartered Accountants for two years, and as Officer-Audit in Madras Cements Ltd. He started in the securities research department at UTI AMC, covering varied sectors such as Information Technology, Capital goods, and metals. He was promoted as fund manager offshore in December 2005 after a three-year stint in the DOSR. He was given additional responsibilities for the equity portion of hybrid funds in October 2009. He reports to the Head – Of equities for both the domestic & hybrid equity schemes.  Mr. Sunil Patil is Executive Vice President & Fund Manager – Debt. He joined UTI AMC in October 1989. He has 28 years of experience in Primary Market Investment / dealing and Fund Management.  Who Should Invest?  Investors looking for overall portfolio diversification.  Investors who want growth with limited downside risk to their portfolio  Investors looking for tax-efficient returns  Retirees looking for moderate and stable returns with low volatility  First-time investors to the Mutual Fund  Why Invest?  Diversified portfolio construct that limits the volatility   Aims to create long-term wealth creation by investing in companies that generate economic value   Portfolio management within well-defined investment philosophy & investment process Around 27 years of Performance track record  Tax efficiency due to equity taxation   Competitive expense structure   Ideal Time Horizon  Ideal for investors with a time horizon of three years and above.   Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The equity portion of the fund's portfolio is managed actively with both top-down and bottom-up stock-picking approaches. In contrast, the debt portion is managed with a focus on good credit quality and low duration. The fund has underperformed the benchmark since its inception. Hence, investors should remain invested long-term to witness alpha generation. 
Empower Grandkids: 7 Financial Tips for Their Bright Future

Empower Grandkids: 7 Financial Tips for Their Bright Future

As a grandparent, you have a unique opportunity to shape your grandchildren's lives, including their financial well-being. By offering guidance and support, you can empower them to make wise financial decisions and build a secure future. In this blog post, we will explore practical tips to help your grandchildren financially.  Whether it's teaching them about money management, fostering good saving habits, or providing educational resources, these tips will equip your grandchildren with the tools they need to thrive. Secure Their Future: 7 Ways to Support Grandchildren Financially 1. Start early  Teaching the basics of money management and financial education is a lifelong journey, and the earlier it begins, the better. Introduce your grandchildren to basic concepts like budgeting, saving, and spending wisely.  Help them understand the value of money and the importance of setting goals. Encourage open discussions about finances and make it a point to answer their questions patiently. By instilling these fundamental principles early on, you lay a solid foundation for their financial future. Start Saving with EduFund 2. Encourage saving habits  Saving is a crucial habit that can benefit your grandchildren throughout their lives. Encourage them to save by setting up a savings account or piggy bank specifically designated for their goals. Teach them the concept of delayed gratification, where they save for something they desire rather than giving in to impulsive spending.  Consider matching their savings contributions or offering small incentives to motivate them. By nurturing their saving habits, you teach them the value of patience, discipline, and long-term planning. Reasons to Start Saving Early Read More 3. Introduce the power of compound interest Teaching your grandchildren about compound interest is a valuable lesson that can greatly impact their financial future. Explain how their money can grow exponentially over time by earning interest on both the initial amount and the accumulated interest.  Illustrate this concept through examples or interactive activities to make it more relatable and engaging. Encourage them to start saving early to take full advantage of the power of compound interest. Start SIP with EduFund 4. Support financial education  In today's digital age, there are numerous resources available to enhance financial literacy. Encourage your grandchildren to explore online courses, podcasts, books, or videos that cover various financial topics. Consider gifting them educational books on personal finance or subscribing to a financial magazine or newsletter that can provide valuable insights. Additionally, you can help them navigate through complex financial terms and concepts, ensuring they have a solid understanding of financial matters. SIP Plans for Child Education 5. Teach responsible credit card usage  Credit cards are a useful financial tool, but if used irresponsibly, they may also result in debt. Talk to your grandkids about the benefits and drawbacks of credit cards, emphasizing the necessity of making prompt, complete payments in order to avoid incurring interest fees.  Teach them to utilize credit cards for convenience instead of reckless spending. Inform them of the possible repercussions of taking on debt and the long-term effects it may have on their financial stability. https://www.youtube.com/watch?v=tdwqQH0xkFw 6. Start a fund for their college Introduce the idea of investing to your grandkids, as well as the possibility of building long-term wealth. You can start a small fund for their college to encourage them. Teach them about investing choices, including stocks, bonds, and mutual funds. Starting an education fund for them will help them a lot in the future. They can use those funds to sponsor their entire college education. This is a great financial relief because often students end up taking big loans that they have to pay off for years after their college ends.  Set Short Term and Long Term Goals 7. Teach the value of budgeting  Making efficient use of a budget is a crucial skill that your grandkids may develop. Show students how to make a budget by keeping track of their earnings, costs, and savings. Explain the difference between needs and wants, highlighting the need of giving priority to necessary costs and making thoughtful financial decisions.  Introduce them to applications or tools for budgeting that can make the process easier and promote ongoing budget evaluations. Early budgeting practices provide your descendants with the capacity to make wise financial decisions and avoid needless debt. College Student Guide To Budgeting Read More 8. Write them into your will If you're a grandparent, you undoubtedly want what's best for your grandkids. You want them to be happy, healthy, and equipped with all they need to thrive in life as they grow up. Additionally, if you're a typical grandmother, you want to be prepared to assist them when necessary. But here's the thing: there are certain things we don't know about, like how to give them money or how we can help financially, when it comes to aiding your grandchildren financially. How then can you ensure that your grandchildren receive the necessary financial support? You should include them in your will as one of your actions. They will receive all they are due when you pass away and your inheritance is distributed in accordance with your desires, regardless of the mischief they got themselves into in the interim. You may have a big effect on your grandchildren's financial situation by using the advice in this article. Building a solid financial foundation requires taking several important actions, including starting young, teaching money management skills, encouraging saving behaviors, and supporting financial education.  Your descendants will have the skills and attitude necessary to successfully manage the complexity of personal finance and ensure a wealthy future if you inculcate these principles and information in them. Keep in mind that your advice and encouragement might have a long-lasting impact on their life. Talk To An Expert
Smart Investments for Kids of 5- 10 Years: A Parent’s Guide

Smart Investments for Kids of 5- 10 Years: A Parent’s Guide

Your child’s expenses do not remain constant all the time. As the child gets older, the expenses start to increase. Expenses like school fees, tuition fees, living expenses, and expenses incurred on other necessities of education such as stationery, electronic gadgets, etc. All these increases as your child grows older.    Parents need to follow the right investing approach to keep pace with potential costs. If not appropriately invested, you may end up having insufficient funds when required, and the stakes can be huge since it is the question of your child's future. Hence, in this article, we will explore what would be the correct approach to investing and how the investments should be made by parents having kids between the age group of 5-10 years.  https://www.youtube.com/watch?v=tdwqQH0xkFw What should be the correct approach to investing, and how to invest?  If you are a parent having a kid between the ages of 5-10 years, you need to be very serious about your investments because you are going to witness a sharp increase in the education expenditure of your child.   The reason is that in the next 4-6 years, your child will complete his secondary education and then be required to take admitted to college. College fees are not the only significant expenditure that you will incur. It is only the tip of the iceberg. Apart from the college fees, you may have to pay the class fees, especially if your child is willing to pursue courses such as engineering from IIT or an MBBS or an MBA from IIM.   Since the courses mentioned generally require the entrance exams to be cleared, the preparation starts much earlier, and you may incur significant outflow from your savings. And remind you; education inflation is among the highest of all the categories. Therefore, you should start investing as soon as possible.   Smart Investment for Kids 1 to 5 years Read More How to do that?  Step 1: First, identify the expenses that you will be required to incur and bifurcate them based on when they will be incurred, such as expenses to be incurred within a year, within 1-3 years, after three years, etc.  Step 2: Once you bifurcate the expenses into these categories, you need to quantify the expenditure. Since the expenses will always be increasing due to inflation, you need to find out how much you will be required to pay; otherwise, you might end up having insufficient funds due to investing less than the required amount. To estimate the education expenditure, you can use the help of our cost calculator.  Step 3: After estimating the amount and timing of expenditure, you need to estimate how much you need to invest to reach the goal. You can do so by using the SIP calculator.   Step 4: Once you find out how much you are required to invest every month, the next step is to determine where to invest. Generally, the longer the duration, the higher the risk-taking ability, and vice versa. A longer duration gives you a chance of recovery if something goes wrong. This is not the case in case of expenditure to be incurred within one year. Hence the risk tolerance decreases as the time horizon reduces.  For long-term time horizons such as 3 to 5 years or even more, investors can consider investing in small cap, mid cap, flexi cap, or focused funds. These funds provide good potential for capital appreciation over the long term. And the volatility also reduces over the long term. For investments with a time horizon of 1-3 years, hybrid funds such as conservative or balanced advantage funds can be suitable since they provide the advantage of both portfolio stability and limited growth potential. Also, an aggressive investor can consider investing in a multi-asset fund that provides diversification across various asset classes such as equities, debt, gold, etc. At the same time, a risk-averse person can consider the debt funds such as gilt-edge funds or dynamic bond funds for the said time horizon. And lastly, debt funds such as liquid funds should be considered for expenditure to be incurred within a year.  Please note the allocation to various types of mutual fund schemes depends on the individual's risk appetite. You need to determine how much risk you can take, and accordingly, you need to select funds for investing.  Step 5: The last step is rebalancing. You just cannot start investing and leave it as it is. It would help if you rebalanced your portfolio from time to time. As you come closer to your goal, you need to reallocate your investments to lesser risky funds since you cannot take high risks as you come closer to your goal.  So, this is the step-by-step guide for investing in your child. Hope you found this article useful. Thanks for reading!  Talk To An Expert
DSP Nifty Midcap 150 Quality 50 Index Fund 

DSP Nifty Midcap 150 Quality 50 Index Fund 

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. Let us discuss the consumer product – DSP Nifty Midcap 150 Quality 50 Index Fund.  DSP Nifty Midcap 150 Quality 50 Index Fund  Investment Objective The scheme's investment objective is to generate returns commensurate with the performance of the Nifty Midcap 150 Quality 50 Index, subject to tracking error.  Investment Process   The scheme is managed passively with investments in stocks in the same proportion as in Nifty Midcap 150 Quality 50 Index.  The investment strategy revolves around minimizing the tracking error through periodic rebalancing of the portfolio, taking into account the change in weights of stocks in the indices as well as the incremental collections/redemptions in the scheme.  A small portion of the net assets will be held as cash & cash equivalent.  Portfolio Composition  The fund had invested 99.69% in equity, and the remaining was held in the form of debt/cash and cash equivalents as on 30th June 2023.  Note: Data as on 30th June 2023. Source: DSP MF Top 5 Holdings  Name Weightage % Tata Elxsi Limited 4.20 Tube Investments of India Limited 3.63 ICICI Securities Limited 3.09 Persistent Systems Limited 3.03 APL Apollo Tubes Limited 2.91 Note: Data as on 30th June 2023. Source: DSP MF  Performance  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 10,850.  Note: Data as of 30th June 2023.Source: DSP MF Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 8.5%.  Invest In Fund Fund Manager  Anil Ghelani has been managing this fund since July 2019 as a Co-Fund Manager. Anil has been working with DSP Group since 2003 and is Head of Passive Investments & Products. Previously, he was the Business Head & Chief Investment Officer at DSP Pension Fund Managers. Before that, he led the Risk and Quantitative Analysis team at DSP Mutual Fund, responsible for monitoring portfolio risk and buy-side credit research on companies across various sectors.  Diipesh Shah has been managing this fund since November 2020 as a Co-Fund Manager. Diipesh has a total work experience of Over 20 years. He has been working with DSP since September 2019 as a Dealer for ETF and Passive Investments. Now he is also the Fund Manager of various schemes of DSP Mutual Fund. Diipesh has worked with JM Financial Institutional Broking Limited, Centrum Broking Limited, IDFC Securities Limited, and Kotak Securities Limited as Institutional Equity Sales Trading.  Who Should Invest in DSP Nifty 50 Index Fund?  Consider this fund if you   Are you an experienced investor or have access to expert advice?  Already have a strong core portfolio and are looking to invest in the mid-cap space.  Want to diversify existing active midcap funds in the portfolio at a lower cost?  Have the patience & mental resilience to remain invested for a decade or more.  Recognize market falls as good opportunities to invest even more.  Accept that equity investing means risk exposure.  Why Invest in this Fund?  Aim to build wealth by investing conveniently in objectively qualified quality mid-cap companies.  Affordable investing as compared to buying individual stocks of the Nifty Midcap 150 Quality 50 Index.  It can help you beat the impact of rising prices over the long term.  Since the fund only replicates an index & does not have an 'active' fund manager, it carries no human decision-making bias.  Have the potential to beat the broader Midcap 150 index & active midcap funds over the long term.  Ideal Time Horizon  One should look at investing for at least ten years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Nifty Midcap 150 Quality 50 Index Fund provides a good option for passive investing in mid-cap equities. Since the fund was launched less than a year ago, it will be required to monitor how efficiently it tracks the underlying index. Investors seeking capital appreciation through mid-cap exposure by following a passive style of investing can consider this fund with a time horizon of ten years or more. 
Embrace These Lifestyle Changes to Save Money

Embrace These Lifestyle Changes to Save Money

In a world driven by consumerism, it's easy to fall into the trap of overspending money and accumulating unnecessary extra debt. However, by making a few intentional changes in lifestyle, you can regain control of your finances thus, preparing yourself for a brighter future. We are presenting a comprehensive guide on how to embrace these changes, not only to save money but also to cultivate a more fulfilling and sustainable life. So, buckle up and embark on this transformative journey with us! Rethink Your Spending Habits The first step towards saving money begins with examining your spending habits. Take a moment to reflect on your purchases and ask yourself if they align with your long-term goals and values. Avoid impulse buying and opt for a more mindful approach. Differentiate between your wants and needs, and focus on fulfilling the latter. Create a Budget Budgeting is an essential tool for financial success. Start by tracking your income and expenses to gain a clear picture of where your money is going. Categorize your expenses and identify areas where you can cut back. Set realistic saving goals and allocate a portion of your income towards them. Remember, a well-planned budget is a roadmap to financial freedom. Cook and Eat at Home Eating out frequently can quickly drain your wallet. Embrace the art of cooking and prepare meals at home. Not only will you save money, but you'll also have control over the ingredients, making it easier to maintain a healthy diet. Explore new recipes, involve your family in meal planning, and make cooking a fun and rewarding experience.  INR 100 Crore Legacy for your Kids using SIP Read More Reduce Utility Consumption Conserving energy and water not only benefits the environment but also reduces your utility bills. Switch to energy-efficient appliances, turn off lights and unplug electronics when not in use, and fix any leaks in your home. Simple acts like taking shorter showers and using cold water for laundry can significantly impact your monthly expenses. Smart Lifestyle Choices for Saving Money Embrace a Minimalist Lifestyle Decluttering your living space can have a profound impact on your mental well-being and finances. Adopt a minimalist approach and declutter ruthlessly. Sell or donate items you no longer need and embrace the freedom that comes with owning fewer possessions. Avoid falling into the trap of mindless consumerism, and focus on experiences and relationships rather than material possessions. Ditch Costly Subscriptions Review your subscriptions and eliminate those you no longer use or find value in. Streaming services like Netflix, Hotstar, or Prime, gym memberships, and magazine subscriptions can add up quickly. Consider sharing accounts with family or friends to reduce costs, or explore free alternatives such as public libraries and online resources. Embrace Second-Hand Shopping Buying brand new doesn't always equate to quality or satisfaction. Embrace the world of thrift stores, consignment shops, and online marketplaces to find great deals on clothing, furniture, and other items. Not only will you save money, but you'll also contribute to reducing waste and supporting a more sustainable economy. Cut Transportation Costs Transportation expenses can put a dent in your budget. Consider carpooling, using public transportation, biking, or walking whenever possible. If you live in an urban area, you might even find that you can go car-free and rely on ride-sharing services or rentals for occasional needs. Embracing alternative modes of transportation not only saves money but also reduces your carbon footprint. Prioritise Free and Low-Cost Activities Entertainment doesn't have to be expensive. Explore the abundance of free or low-cost activities available in your community. Visit parks, organize picnics, join local clubs or organizations, attend free events and festivals, and utilize public amenities such as libraries and museums. By finding joy in these activities, you'll realize that happiness can't always be bought. Cultivate a DIY Mindset Learning new skills and tackling projects yourself can save you a significant amount of money. Whether it's fixing a leaky faucet, painting a room, or gardening, take the time to develop your DIY skills. Numerous online resources and tutorials are available to guide you through the process, empowering you to take charge of your surroundings and your budget. Saving money is not just about penny-pinching; it's a lifestyle choice that can lead to financial freedom and personal fulfillment. By embracing minimalism, cooking at home, cutting down on subscriptions, prioritizing saving, embracing second-hand shopping, reducing energy consumption, adopting DIY and upcycling, and cultivating a frugal mindset, you can transform your life and pave the way for a brighter future.  Remember, it's not about depriving yourself of joy, but rather finding happiness in the simple things and making intentional choices that align with your values and goals. So, start today and embark on a journey toward financial independence and a more fulfilling life.
What Type of an Investor Are You?

What Type of an Investor Are You?

Investing is an art, a game of numbers and strategy that has the power to shape our financial futures. But when it comes to investing, one size doesn't fit all. Every individual has unique goals, preferences, and risk tolerance which determine the type of investor they are.  Are you an adventurous risk-taker, or do you prefer a more cautious approach? Are you actively involved in managing your investments, or do you prefer a hands-off approach? By identifying your investing style, you can make more informed decisions and tailor your portfolio to suit your individual needs. What type of investor you are? 1. Risk-Averse Investor For some individuals, the thought of losing money is enough to keep them awake at night. They prioritize the preservation of capital over high returns. Risk-averse investors tend to choose low-risk investment options, such as government bonds, money market funds, and certificates of deposit (CDs). They give importance to stability and are more comfortable with predictable, albeit lower, returns. 2. Risk-Tolerant Investor On the other end of the spectrum, we have risk-tolerant investors. They are thrill-seekers, willing to take on higher levels of risk in pursuit of higher rewards. Risk-tolerant investors are often attracted to aggressive investment options, such as growth-oriented mutual funds, individual stocks, and alternative investments like real estate or commodities. They understand that with higher risk comes the potential for greater returns, but also the possibility of significant losses. 3. Active Investor Active investors are hands-on participants in the investment process. They actively research, analyze, and monitor their investments. They make frequent trades, seeking to take advantage of short-term market fluctuations. Active investors often enjoy the thrill of the chase and the potential for quick gains. They keep a close eye on market news, company earnings reports, and economic indicators to make informed decisions. Guide to Investing in US ETFs Read More 4. Passive Investor In contrast to active investors, passive investors prefer a more laid-back approach. They believe in the efficiency of the market and aim to match the overall market returns rather than trying to beat it. Passive investors typically invest in index funds or exchange-traded funds (ETFs) that track a specific market index, such as the S&P 500. They benefit from diversification and low fees, and they tend to have a long-term investment horizon. Note: Finding your investor type is not a one-time decision but a reflection of your evolving financial goals, circumstances, and risk appetite. It's essential to understand that your investor type can change over time as you gain more experience or undergo life changes. Moreover, a balanced approach to investing can often yield the best results. 5. Assessing Your Risk Tolerance Apart from determining your investment style, understanding your risk tolerance is crucial for successful investing. Risk tolerance refers to your ability to endure market volatility and the potential loss of capital. While aggressive investors are comfortable with higher levels of risk, conservative investors prefer lower-risk investments to protect their principal. It is important to strike a balance between your risk tolerance and investment objectives to ensure your investment strategy aligns with your financial goals. https://www.youtube.com/watch?v=tdwqQH0xkFw Introducing EduFund: Investing Made Easy for Parents Now that you have explored the various types of investors, it's important to mention EduFund, a platform designed to empower parents in their investment journey. Investing is not limited to individuals; it extends to families and their futures. As parents, we strive to provide the best opportunities for our children, including their education. EduFund understands the importance of investing in your child's future and empowers parents to become smart investors. EduFund offers a comprehensive solution that educates parents about the risks and benefits of investing. The platform provides valuable resources such as blogs, quizzes, and weekly insights to help parents deepen their understanding and make informed decisions. Whether you are a risk-seeking adventurer or a risk-averse cautious investor, EduFund caters to your unique needs. What sets EduFund apart is its commitment to empowering parents with knowledge and resources. Through the EduFund app, parents have access to a wealth of educational materials, including blogs, quizzes, and weekly insights. These resources help parents understand various investment concepts, debunk myths, and make informed decisions. One of the key advantages of EduFund is its emphasis on autonomy. Parents have full control over their investment decisions, allowing them to align their investments with their financial goals. However, EduFund also recognizes that investing can be daunting, especially for those new to the world of finance. That's why they provide expert guidance whenever needed. Parents can seek assistance from experienced professionals who can answer their questions and address their concerns. Investing in your child's education is an investment in their future success. EduFund helps you navigate the world of investments with confidence, ensuring that your child's educational aspirations are within reach. Join EduFund today and embark on a journey toward securing a bright future for your child. Understanding your investor type is crucial for achieving your financial goals. By reflecting on your risk tolerance and level of involvement, you can align your investment strategy with your unique preferences. Whether you identify as an adventurous risk seeker or a cautious capital preserver, EduFund is there to support you every step of the way, providing education, autonomy, and expert guidance. Begin your investment journey with confidence and empower your child's future through the power of EduFund.
EduFund's college cost calculator helps parents plan for college expenses

EduFund's college cost calculator helps parents plan for college expenses

The EduFund college cost calculator is India’s first education cost calculator that helps parents estimate the future cost of college. This user-friendly calculator provides accurate estimates of future costs associated with higher education, allowing individuals to make informed financial decisions.  https://www.youtube.com/watch?v=aV0_hgP8S1w India’s first college cost calculator in India  EduFund's College Cost Calculator is the first of its kind in India, specifically designed to cater to the unique needs of Indian students and parents. It considers various factors such as tuition fees, living expenses, scholarships, and rate of inflation to provide a comprehensive estimation of the total cost of a college education.  1. Saving for College made easier  One of the key features of EduFund's College Cost Calculator is its ability to help individuals save for college expenses. By inputting their current savings and monthly contributions, users can visualize how their savings will accumulate over time. This feature allows students and parents to set realistic savings goals and create a solid financial plan for future education.  2. Beyond Tuition Fees: School Fees, Laptops, Books, and More EduFund's College Cost Calculator goes beyond just estimating tuition fees. It considers additional expenses such as school fees, accommodation costs, transportation, laptops, textbooks, and other educational resources. By including these factors, the calculator provides a more accurate and holistic picture of the overall expenses students and parents may encounter during the college journey.  3. User-Friendly Interface  EduFund's College Cost Calculator boasts a user-friendly interface that simplifies the process of calculating college expenses. With intuitive navigation and clear instructions, users can effortlessly input relevant information and receive instant estimates. The calculator ensures that even individuals without a financial background can easily comprehend and utilize the tool effectively.  4. Future cost of studying  One of the most powerful aspects of EduFund's College Cost Calculator is its ability to calculate the future cost of studying. By considering the projected inflation rate and the duration of the course, the calculator provides an estimation of the total cost a few years down the line. This foresight allows students and parents to plan and adjust their financial strategies accordingly.  Calculate College Cost How to use EduFund's college cost calculator?  Using EduFund's College Cost Calculator is a straightforward process that allows students and parents to gain valuable insights into the financial aspects of higher education. By following these simple steps, users can effectively utilize the calculator to plan for college expenses:  Visit the EduFund Website:  Access EduFund's official website to find the College Cost Calculator. The calculator is usually prominently displayed on the homepage or can be located in the "Tools" or "Resources" section.  Provide Basic Information:  Begin by entering the required basic information. This typically includes the current age of the student, the age at which they plan to start college, and the expected duration of the course. Input College Expenses:  Next, input the various college expenses that need to be considered. These may include tuition fees, school fees, accommodation costs, transportation expenses, books, laptops, and other related costs. EduFund's calculator is designed to provide a comprehensive estimation of all potential expenses.  Consider Inflation:  To ensure an accurate projection, the calculator factors in inflation rates. Enter the expected inflation rate based on historical data or estimates. This step is crucial as it helps account for the rise in college costs over time.  Include Current Savings:  If you have any existing savings earmarked for college, include them in the calculator. Enter the current amount saved as well as any ongoing monthly contributions towards the college fund. This feature allows users to understand how their savings can grow over time.  Review and Analyze Results:  Once all the necessary information has been entered, review the results provided by the calculator. EduFund's College Cost Calculator typically generates a detailed breakdown of the estimated total cost of college education, including a year-by-year analysis. It may also provide insights into the amount needed to save monthly or annually to achieve the desired goal.  Adjust Parameters:  If the results do not align with your expectations or financial capabilities, you can adjust the parameters within the calculator. Try modifying the duration of the course, monthly contributions, or inflation rate to explore alternative scenarios and find a plan that suits your needs.  Save or Print Results:  To have a record of your calculations or to share the information with others, consider saving or printing the results. This allows you to refer back to the estimates and financial projections whenever needed.  Remember, EduFund's College Cost Calculator is a dynamic tool that helps you gain insights into the future cost of studying. As circumstances change, such as college selection, scholarships, or financial situations, you can revisit the calculator to adjust and refine your financial plan accordingly.  By following these steps and utilizing EduFund's College Cost Calculator, students and parents can proactively prepare for the financial demands of higher education, empowering them to make informed decisions and create a solid financial strategy for a successful college journey.  What is College Cost Calculator? Read More Conclusion Empowering Financial Preparedness with EduFund's College Cost Calculator. By providing accurate estimations, a user-friendly interface, and comprehensive insights, this tool equips students and parents to plan effectively, ensuring a stable financial foundation for higher education. 
What is US stock marketing timings?

What is US stock marketing timings?

The stock market is not just a trading hub but also a real-time tool for monitoring the state's financial performance.   Having one of the strongest economies in the world, the stock markets in the United States are one of the most financially rewarding avenues for people interested in investing in company shares, derivatives, bonds, futures, commodities, and other financial instruments, which is why foreign investors keep an eye on US market trading hours.   Indian investors can now easily invest in the stock markets of the United States thanks to technological advancements. Through this article, you will get to know everything about the US stock market timing Regular trading hours in US time  The New York Stock Exchange (NYSE) and NASDAQ, in particular, open at 9.30 a.m. and close at 4 p.m. ET (Eastern Time), a time zone that encompasses the Eastern states of the United States and parts of Canada. On weekends and holidays, the stock exchanges are closed.  Every year, there are a few market half-days. Depending on the calendar, they may fall on July 3 or 5, the day after Thanksgiving, and Christmas night. The NASDAQ and NYSE both close at 1 p.m. ET on certain half-days.  Regular trading hours Indian time  Investing in India is critical to account for the time difference between the United States and India. The NYSE and NASDAQ open and close at 8 p.m. (IST) and 2.30 a.m. (IST) respectively.  Due to daylight saving time, this varies throughout the year (DST).   Eastern Standard Time, or EST, is a time zone observed throughout the United States throughout the autumn and winter months.   EDT is 9.5 hours behind IST because it is 4 hours behind Greenwich Mean Time (UTC - 4).  Source: Pixabay Daylight saving time  One factor to remember when it comes to stock market timing in the United States is the effect of daylight-saving time, which occurs when the country's clocks are ahead by one hour.   DST is observed from the second Sunday in March to the first Sunday in November. The stock markets in the United States open at 7:00 p.m. IST and close at 1:30 a.m. IST.  Eastern Daylight Time, or EDT, is observed during the summer and spring seasons. Compared to Greenwich Mean Time or UTC - 5, EST is 5 hours behind and 10.5 hours behind IST.  Pre-market and after-hours trading hours  Trading is done in the United States even outside of typical business hours. Pre-market trading runs from 8 a.m. to 9.30 a.m. ET, or 1:30 p.m. to 7 p.m. IST, while after-hours trading runs from 4 p.m. ET to 8 p.m. ET, or 1:30 a.m. IST to 5:30 a.m. IST.   However, one should be mindful of the hazards because of the poor liquidity, low volume of participants, and volatility associated with pre-market and after-hours trading. The investing platform will determine whether one can invest pre-market or after-hours.  The timings in IST for other US stock exchanges are given in the table below.  NameStateOpening Bell (in IST)Closing Bell (in IST)Boston Stock ExchangeMassachusettsIt was acquired by NASDAQ Inc. in 2007.Chicago Stock ExchangeIllinois7:00 PM1:30 AMInternational Securities ExchangeNew YorkIt is a wholly-owned subsidiary of NASDAQ Inc.Miami Stock ExchangeFlorida7:00 PM1:30 AMNational Stock ExchangeNew JerseyThis was acquired by the NYSE in 2017 and is now traded as NYSE National.Philadelphia Stock ExchangePennsylvaniaThis was also acquired by NASDAQ Inc. and is traded at NASDAQ as Nasdaq OMX PHLX. The two largest stock exchanges in the United States, NYSE, and NASDAQ have bought the bulk of regional stock exchanges. As a result, regional time zones do not affect the timings of US stock markets in India.  List of holidays observed by the US Stock exchange Holiday202220232024New Year’s Day—Monday, January 2 (New Year's holiday observed)Monday, January 1Martin Luther King, Jr. DayMonday, January 17Monday, January 16Monday, January 15Washington's BirthdayMonday, February 21Monday, February 20Monday, February 19Good FridayFriday, April 15Friday, April 7Friday, March 29Memorial DayMonday, May 30Monday, May 29Monday, May 27Juneteenth National Independence DayMonday, June 20 (Juneteenth holiday observed)Monday, June 19Wednesday, June 19Independence DayMonday, July 4Tuesday, July 4**Thursday, July 4**Labor DayMonday, September 5Monday, September 4Monday, September 2Thanksgiving DayThursday, November 24***Thursday, November 23***Thursday, November 28***Christmas DayMonday, December 26 (Christmas holiday observed)Monday, December 25Wednesday, December 25**** ** On Monday, July 3, 2023, and Wednesday, July 3, 2024, At 1:00 p.m., each market will close early (1:15 p.m. for qualified options).  On these dates, Crossing Session orders will be accepted starting at 1:00 p.m. for continuous executions until 1:30 p.m., while the late trading sessions for NYSE American Equities, NYSE Arca Equities, NYSE Chicago, and NYSE National will close at 5:00 p.m. All times are in Eastern Standard Time.  *** On Friday, November 25, 2022, Friday, November 24, 2023, and Friday, November 29, 2024, each market will close early at 1:00 p.m. (1:15 p.m. for qualified options) (the day after Thanksgiving).   On these dates, Crossing Session orders will be accepted starting at 1:00 p.m. for continuous executions until 1:30 p.m., while the late trading sessions for NYSE American Equities, NYSE Arca Equities, NYSE Chicago, and NYSE National will close at 5:00 p.m. All times are in Eastern Standard Time.  **** On Tuesday, December 24, 2024, each market will close early at 1:00 p.m. (1:15 p.m. for qualifying options).   On this date, Crossing Session orders will be accepted starting at 1:00 p.m. for continuous executions until 1:30 p.m., while the late trading sessions for NYSE American Equities, NYSE Arca Equities, NYSE Chicago, and NYSE National will close at 5:00 p.m. All times are in Eastern Standard Time. FAQs What are the trading hours in the USA? The New York Stock Exchange (NYSE) and NASDAQ, in particular, open at 9.30 a.m. and close at 4 p.m. ET (Eastern Time), a time zone that encompasses the Eastern states of the United States and parts of Canada. On weekends and holidays, the stock exchanges are closed. What time can Indians invest in USA stocks? Investing in India is critical to account for the time difference between the United States and India. The NYSE and NASDAQ open and close at 8 p.m. (IST) and 2.30 a.m. (IST) respectively.  What are Pre-market and after-hours trading hours in USA? Trading is done in the United States even outside of typical business hours. Pre-market trading runs from 8 a.m. to 9.30 a.m. ET, or 1:30 p.m. to 7 p.m. IST, while after-hours trading runs from 4 p.m. ET to 8 p.m. ET, or 1:30 a.m. IST to 5:30 a.m. IST. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
Importance of investment

Importance of investment

You've probably asked yourself this question repeatedly- 'why investing is important?'. While there are many reasons, the most significant is financial stability. Investing refers to channeling your money into different financial instruments to achieve profits and grow your capital. You can earn money in two ways - work for someone else or work on your venture. You sharpen your mind and different skills that help you earn money.   Another way to make money is by making your money work to get wealthier. Investing serves this purpose. This article will figure out a few reasons why investing is essential. What are the different ways to invest?  There are many ways to invest, for example, stocks, bonds, mutual funds, options, futures, precious metals like gold and silver, real estate, and other small businesses, or possibly a combination of all of the above.   Income can come in the form of appreciated value to the investment, dividend income or from, the sale of a business, or liquidity of any other of the above instruments. Beginners Guide to Education Inflation Read More Why investing is important?   Investing is essential for many reasons. For example, to create wealth that might help you in tough times or help you achieve goals.   And you also want to take advantage of the power of compounding, not forgetting inflation, so that your money is worth it over time.   If you plan to retire at some point in time, you must invest in getting a corpus for yourself to live your retired life in a hassle-free manner.  Wealth creation could mean having a certain amount of money in your bank account or having a particular value of assets under your name.  Let's see how investment helps in wealth generation. Why should you invest? Investment is a way to grow your money. The creation of wealth isn’t merely a goal; it will help you through your lifetime; In fact, it can help your future generations shape their future.   Investing will allow you to take advantage of the compounding power of money. For every rupee that you invest and earn, your investment base will grow, and thus grow; your capital will grow.  For example, we can take the 15 * 15 * 15 rule that we have read in another article; it is a powerful way to invest and achieve your financial and life goals.   Money sitting in your bank account loses its value over time because of rising prices in the economy. If prices are rising, your money will be bought less today than yesterday.   If there is inflation over 30-40 years, the value of your money is going to be reduced by a significant amount. Investing can help you beat inflation by earning more than what is lost by inflation - so that your money remains worth at least the same over time.   Retirement is also a valid reason for you to start investing. You need to have a large corpus to live off the last 20-30 years of your life.  Saving and investing for retirement requires careful planning and calculation of the amount you will need, and then proceed with an investing strategy.   Your child's future: In one of the previous articles, we talked about how important it is to save and invest for a secure future for your child.   Investing in your child's education and marriage requires investing in a well-phased manner with appropriate withdrawal options in times of need. Benefits of Investing   1. Returns on your investments  The greatest benefit of investing is the returns you gain in the long haul. Investing right, consistently, and early on can help any investor make good returns. While saving your money in a bank account is tempting and safe, it is not always the best option for your money. Make the most of your savings by learning the importance of investment.   From investing in Indian stocks, US stocks, index funds, and mutual funds to ETFs, the choices are endless. After determining your goals, preferences, and risk appetite, you can either invest on your own or approach a financial advisor to make the best possible decisions.    2. A chance to meet your financial goals   The importance of investment lies in what it can help you achieve! From building a house to financing your child’s education, you achieve them all with the right kind of investments. Once you have your financial goals in mind, a time horizon, and understand your risk appetite, you can start making investments.   You can start investing with as little as Rs. 100 and step up your investments as your income goes. There are many ways to invest such as SIP and lumpsum, you can either invest consistently every month or in one go.    3. A way to plan your retirement   Investing is also a means of creating a retirement fund for yourself sooner rather than later. By investing in mutual funds, you can create a retirement plan in the time horizon you want and make use of compounding that can double the returns. Another benefit is that investment helps you beat inflation.   4. Investing saves taxes Investing can help you save money on taxes as well. If you make an investment of Rs 1.5 lakh under Sec 80C to reduce your taxable income. You can invest in PPF, ELSS (Tax Saver Funds), Sukanya Samriddhi Yojana (SSY), Fixed Deposits, and National Pension System (NPS).    5. Investing helps with big purchases  The greatest benefit of investing your money is that it can help you make big purchases. Whether it’s your child’s education, a retirement fund for yourself, buying a house, a luxury car, or taking a world tour. Good investments can help you make all these big purchases easily without taking a loan or digging into your current savings.   For example, you have 15 years till your child is off to college. You decide to save a small sum of money every month for the next 15 years and increase the investment every few months to achieve your set goal. By the end of these fifteen years, you will have built a sufficient education fund that your child can use and make their college dream a success without worrying about debts or loans. This is the power of investing and a good investment requires great market research, diversification, and attention to detail!   6. Beats Inflation   Inflation is the greatest villain in your financial journey. It gradually erodes the value of your money, increases the cost of all essential goods and services, and devalues your savings. Certain investments like gold, mutual funds, index funds, ETFs, and stocks have the potential to beat inflation. They have the potential to give you an interest above the estimated inflation rates in the years to come. This is not feasible if your money is in a savings account or stored away in an FD.   In fact, inflation affects certain areas of life more than others. Education, healthcare, and the oil industry are impacted most by inflation. The cost of education is rapidly increasing as a result of it – universities like Allahabad University have increased their tuition fees by 300% this year. This is just one example – pursuing medicine in India is a rich man’s dream now. It can cost you nearly 1 Cr to complete a medical degree from a private college today.    7. It acts as an emergency fund   Investments are also your emergency funds. A medical crisis, an emergency, or a job loss – investments can help you with a host of financial problems and ensure you are able to take care of your responsibilities with ease. Good investments are hard to manage on your own, you can always reach out to a financial advisor that can help you invest in funds that you can liquidate and use whenever the need arises. Remember investing and saving must go hand in hand if you want to meet your financial goals timely and successfully!   FAQs What are the different ways to invest? There are many ways to invest, for example, stocks, bonds, mutual funds, options, futures, precious metals like gold and silver, real estate, and other small businesses, or possibly a combination of all of the above. What are the benefits of investing? Benefits of Investing: Returns on your investments A chance to meet your financial goals A way to plan your retirement Investing saves taxes Investing helps with big purchases Beats Inflation It acts as an emergency fund What is the value of time in investing? Time is extremely valuable while investing. It helps you grow your wealth without the fear of sudden losses. It allows you to invest in assets that have long-term benefits. TALK TO AN EXPERT
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