There was a time when investing in mutual funds was considered extremely risky & only a handful of smart investors were betting on mutual funds to get high returns. With time, people have started understanding the mechanism of building wealth in the long run by investing through mutual funds & began witnessing their investments bringing enormous returns over time.
At present, investing through mutual funds in India has become common among salaried professionals, students and businesspersons.
Having understood the huge financial advantages of investing through mutual funds in India, the only thing that demands expert advisory is how much you should invest through mutual funds. You should also be able to beat the ever-rising inflation.
Let’s unveil how much should working professionals, students & business owners invest in mutual funds in India to build long-term wealth:
Salaried professionals, be it in government organizations, startups or MNCs are among the top investors in mutual funds in India. With having a fixed monthly income, it’s easier for them to invest money through mutual funds via SIP (Systematic Investment Plan) or direct investment.
In general, if a salaried person earns anywhere between Rs 10,000 – Rs 30,000, investing Rs 1,000 to Rs 4,000 per month through mutual funds would be an ideal choice. If he/she draws more than Rs 50,000, then investing at least 20% of earned income in mutual funds in India would generate enough wealth for them over time.
Furthermore, professionals who make more than 1 Lakh per month can choose to invest anywhere between Rs 20,000 to Rs 30,000 in multiple high-growth mutual funds in India. Interestingly, as Indian mutual funds industry eyes Rs 100 trillion AUM opportunity, investing in the right mutual funds in India could prove to be a gold mine in the future for small or big investors in India.
It’s widely known that compounding (re-investing profits to make investments grow more) works hard in favour of people who start early in the investment game. With the advantage of being young, students aged above 18 can accumulate massive wealth over time by investing early through mutual funds in India.
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Investing early through mutual funds can be hugely advantageous for students. As time is in their favour, they can invest through the right mutual funds and further invest the generated returns to create wealth.
Since most students don’t earn and rely on fixed pocket-money provided by their parents, they could start investing as low as Rs 500 in a month in a small, medium or large mid-cap mutual funds via SIP.
As most small business owners prefer to re-invest their profits back in their businesses, the analogy of further investing in mutual funds to generate long-term wealth is easily understandable to them.
For businesses falling in the unorganized sector, it’s quite hard to estimate their average income. Moreover, the inability to file ITR returns by most owners makes the estimation harder.
Let’s assume, if an average business owner earns between Rs 1,000 to Rs 3,000 every day, then the ideal monthly amount to invest through mutual funds in India would be between Rs 4,000 to Rs 10,000 per month. By investing Rs 4,000/month in low-risk mutual funds in India, a small business owner can gain more than 2 Crores with the total investment of 12 Lakhs in 25 years.
Start Investing as Low as Rs 500 in Mutual Funds
Conclusively, investing through mutual funds in India is a disciplined practice, and there ought to have enough diversifications to achieve a pre-set long-term financial goal. It’s impressive how financial advisory service providers like FinEdge are making it easier for beginner investors in understanding the basics of mutual funds & its long-term financial benefits. By providing sound mutual fund knowledge and proper handholding, these financial advisory services are a boon to beginners looking to build wealth in the long-term by investing through mutual funds in India.
If you haven’t started investing through mutual funds in India yet, start today. Happy investing!