How to Plan your Finances with Mutual Funds
Everyone has a different sentiment of what drives them – it can be to own that dream house, that perfect destination wedding, the flashy SUV or a foreign trip.
To turn these dreams into reality, you have to plan – both personal and financial and this is where Mutual Funds come in and not blind beliefs and superstitions.
What are your financial goals?
Start with a definition of what your Financial Goals are. The drives we mentioned above are your goals and to achieve them you need money. So be it for education, marriage, house, car or a foreign trip you have to plan your financial goals accordingly within a set timeframe.
How to plan your financial goals?
Here are a few factors to help you plan and decide on your financial goals:
- Gaining Clarity – For achieving the same you require a basic knowledge about various options of saving and investing, their plus points (like safety, liquidity etc.) and ‘minus points’ ( such as risks, low returns, lack of liquidity) etc. Such knowledge and clarity can be acquired through friends, advice from financial consultants, banks etc.
- Disposable Income – Availability of disposable income after meeting unavoidable expenses that you may have such as – rent, electricity/other bills, education expenses, insurance premiums, food and other essential household expenses. Usually the amount left/available each month after meeting all these essential outgoings are not sufficient to meet lump sum investments such as a down payment for a flat, overseas education, foreign trip etc. So you have to take a stock of your finances – the incomings and outgoings.
- Investment Plan – Once you gain clarity and understand your income and expenses, you then move on to an investment plan and the discipline for systematic investments for ‘achievement financial goals
But for this, you need to step out of you comfort zone. People tend to get scared of numbers, the hows and wheres, the very fact of putting away an amount of money aside every month or cutting down their expenses can seem overwhelming initially, but once you see the investments bearing fruit over a long term, it will put all your worries at ease.
What these adverts by Birla Sunlife Mutual Fund show us is how some people are not wanting to step out of their comfort zones to invest their money in the right way in the right place.
This advert #JanoTohMano sheds light on many a superstitious beliefs that many still reel under by not investing our hard earned money wisely.
Superstitious Beliefs in Investments
While investments / wealth creation, may be affected to a certain extent due to lack of financial planning, wrong advice etc., blind superstitious beliefs in investing can cause havoc. These may range from sending out bulk e-mails for friends and family in hopes of growing money, belief that money plants grow money and so forth.
Amongst the various options for investing, Equity Mutual Funds offer the best route for making one’s money grow over a certain period (more than 5 years). Since equities are subject to market volatility, one is well advised to adopt the SIP.
Birla Sunlife Mutual Fund’s educational video is a must watch for all that provides unbiased information to both existing and first-time investors.
Do watch the video and apply in your daily life. Happy investing for wealth creation; remember, money does not grow on trees…
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One thought on “How to Plan your Finances with Mutual Funds”
Enjoyed reading your article Ma’am, you have simplified to a great extent which really helps. Thanks