Planning is an important aspect of everyone’s life. It may be a Future plan, Financial plan, Business, or any other plans. It would be difficult if there is no planning involved in anything we do. It plays an important role in helping you to achieve your goal. As planning is important, It is also important to map out a financial structure.
Financial planning is completely based on a person’s pay, expenses, savings and investments. There are two types of investment: Short term and long term investments. Short term investments include large cap mutual funds and FDs. On the other hand, Long term investments include dividend stocks, bond funds and small cap stocks.But to invest, one needs to understand how and where to do the right investment. Where you want to invest mostly depends on what your goals are. Depending on your goals you can invest in either short term or long term investment. So planning investments in the right way for a long term makes life easier.
. A Mutual Fund is an easy and right option to invest your money. We can start investing as low as Rs. 500 per month. It makes investment easier for many people with low salaries. Hence it won’t be an issue for anyone to start investing even with little money and gain returns accordingly. Mutual funds make investment easy for many people who can’t invest huge amounts at once. You can start monthly recurring deposits i.e. SIPs and invest a large amount slowly in years to come. This makes mutual funds an appropriate investment option for those who want to start investing as little as possible.
There are options of investment in mutual funds:-
This option is for those who want to invest a certain amount only once. For example, Mr. A has Rs. 1 lakh and he wants to invest Rs. 80 thousand for 5 years. So he can opt for this option of Lump Sum. In simple terms, Lump Sum is nothing but investing a certain amount of money for a few desired years. Hence it would be a great option for those who want to invest huge amounts for a desired period of years.
SIP (Systematic Investment Plan): This would be ideal for those who are willing to invest but with a small amount of money. This is helpful for less-salaried people as it would be easier for them to invest with small amounts and without worrying much about their utility expenses. For example, Mrs. M’s salary is Rs 15,000 and she has utility expenses and it’s hard for her to invest huge amounts. So she can start investing with a minimum of Rs 500. And after a few years or months, she can increase the amount or withdraw after completing her desired years.
These are the advantages of investing in mutual funds as it makes investing easier. All it requires is a mutual fund app and bank account to start investing.