With economy on an upscale, so too the financial needs of the masses. In fact financial choices of people have undergone a massive change. A natural tendency of human beings is to save less and spend more. But for all those who understand the meaning of saving this is not altered. In spite of the paradigm shift of financial resources, people realize one important thing the value of money remains the same in all situations. This would mean that something that stands at Rs 100 in the market as of now would be at Rs 70 in a few years’ time. This is because of inflation.
No point in saving money, but you needs to invest in a safe manner to make it grow
The moment prices go high it is inflation. It means how much money you end up saving; this saved money is not going to exceed inflation that is going to decrease the value of saving. For example if you had gone on to save Rest 1 lakh and invested in a flat in 1980, in modern times it would be virtually impossible to make any real estate investment with that money. The best way to cope up with inflation is to stick to direct mutual fund investment. This would help your money to grow exceeding inflation. Apart from real estate, stocks along with mutual funds are the best avenues to multiply your money. Out of them mutual funds are popular and have gone on to capture a major market share.
With mutual funds how you can grow money
In simple terms a collection of mutual funds from various sources is termed as mutual funds. This is managed by an asset management company and they invest the funds on behalf of the investor for a fixed sum of money. A common man is of the perception that the best way to save money is through bank deposits, but mutual funds works out to be the best form of saving. The reason being that an investor you do not require a lot of knowledge to invest in mutual funds.
To a certain extent mutual funds require some level of knowledge and understanding but it is depending upon your financial goals. Numerous mutual funds are available in the market, but you need to decide which type of mutual fund suits your needs. The concept of untouched money is fundamental. In case if you are planning to increase the fixed form of money then you need to invest for 5 years on an average. Then only you can cash in on the power of compounding. With direct mutual fund investment timing is of essence.
Because of all these reasons if someone is starting out new or even if you are a seasoned campaigner it is better to have dedicated portfolio managers to manager your fund. Though it is not necessary that you need to avail the services of such managers and if you have sufficient knowledge you can take the plunge yourself.
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