<p><strong>Written by Mayank Bhatnagar</strong></p>
<p>There are several broad guidelines in the mutual fund sector; for example, some recommend investing 30% of your income. Some people suggest that you begin with Rs. 100 per month and increase it over time. Others still suggest that you save whatever money that remains at the end of the month after covering your monthly expenses.</p>
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<p>Unfortunately, starting your mutual fund investing adventure with any of these broad recommendations is a really bad idea!</p>
<p>Across all possible asset classes, mutual funds are without a doubt the finest option when it comes to investing for your long-term objectives. Since they are set up like a trust, your money is secure, subject to strict regulations, administered in an open and transparent manner, among the lowest costs, and may be tailored to meet your specific needs thanks to the more than 3000 schemes that are available. What other asset type can make all of the aforementioned claims?</p>
<p>In addition to the aforementioned, mutual funds may outperform inflation over an extended period of time by a factor of two to three times returns on a post-tax basis. Most investing asset types could not even come close to matching this.</p>
<p>You may and should devote 100% of your long-term portfolio (five years or more) to equities mutual funds. The catch is that, in order to avoid having your path suddenly derailed, you must first establish realistic expectations and understand risk and return before investing!</p>
<p>Determining the required investment amount comes next once you have chosen where to place your money. Avoid the pitfall of making an arbitrary investment amount! These haphazard investments will be unreliable and have little practical use. It is crucial to follow a predetermined strategy when making investments, one that includes pertinent and well-defined objectives.</p>
<p>Your financial objectives are the greatest guide to help you choose how much you should invest in mutual funds. Retirement, paying for children’s school or marriage, paying off a mortgage early, creating an emergency fund, or even saving for a down payment on a new car are some of the main objectives that our customers save for.</p>
<p>In order to ensure that the target amount will help you achieve your stated objectives when the time comes, a trained investing professional may assist you in defining these goals, prioritizing them, and accounting for inflation. For instance, if education expenditures in India continue to rise at the current rate of 7-8%, an MBA degree that now costs Rs. 10 lakhs would likely cost between 32 and 35 lakhs in 2040.</p>
<p>The good news is that you have time on your side, so even a Rs. 4,000 monthly SIP, directed towards the appropriate fund, will help you achieve your objective.</p>
<p>You will discover that this scientific method now enables you to rapidly determine the amount necessary to fulfill these significant objectives after you have determined your purpose and the amount needed to reach the goal in the future.</p>
<p>This amount is often more than you would wish to put away given your current financial circumstances. Goal prioritization may help with this. It allows you to start with your top priority goal and gradually increase your investments over the course of the next few years to accomplish your other objectives as your income increases. Step-ups that are disciplined may have amazing force!</p>
<p>Although the aforementioned procedure might help you begin investing properly, it’s important to keep in mind that consistency in investment is crucial.</p>
<p>It is important to make sure that funds allocated for objectives do not wind up being utilized to finance extravagant lifestyle purchases. You should only break the figurative piggy bank in an extreme situation. Your goal-based investments should be sacred!</p>
<p>Sensationalized news and market commotion shouldn’t tempt you to attempt timing the market. Above all, avoid starting to chase profits by comparing your assets to those of others.</p>
<p>Seek professional assistance not only to determine your objectives and the calculations associated with them, but also to enable experts to assist you in maintaining your investment despite market turbulence. The secret to becoming a good investor is resilience! While starting is simple, staying involved and building money is a whole other story.</p>
