5 mutual fund myths busted

Investing in mutual funds is beneficial for all of us. It is an unavoidable part of our financial planning. But there are many myths and misconceptions about investing in mutual funds.

Some of them are explained below:

1. It is for rich people

Many of us think that investing in the mutual fund in India is only for rich people. This concept is very delusional. There are Systematic Investment Plans where the investor can invest a minimum amount of money periodically. They do not have to pay a lump sum amount of money at a time. It is completely understandable that, for someone with a monthly income of 20,000, investing a huge amount of money in mutual funds is not practical. But one can invest 500 rupees monthly as SIP and get the same benefits. Thus, we can say, that the mutual fund is for everyone.

2. No need for a retirement plan

It is commonly thought that, when we are retired, our expenses will decrease so we do not need any financial planning. But the reality is different. When we retire, our expenses may shrink a bit, but our income drops to almost zero. We have a lot of free time; we can plan a vacation or start a new hobby. For anything, we need money at hand. Medical expenses also increase in our retirement life. So, we need to plan for our retirement and invest in mutual funds online to spend our retirement life comfortably.

3. Too early to start planning

Investing in a mutual fund in India can never be too early. The younger you start, the more returns you get. Economic planning is a lengthy process, so starting early is the best option for all of us. If we face a sudden financial crisis, we must be prepared for it. We can only survive an economic collapse if we are already an investor. Investing newly during any financial crisis is not at all helpful.

4. Profound knowledge is a must

When we invest in any mutual funds online, our fund is looked after by expert agents. They allocate our funds in those schemes where we get the maximum benefits. So the investor can rely on the mutual fund company experts. Thus, having profound knowledge about mutual fund investments is not necessary if one wants to invest. Amateurs can also invest in mutual funds in India and gain good returns.

5. One-time planning

Financial planning is not a one-time thing. One needs to plan early and repeatedly to reach high financial goals. We cannot invest in a mutual fund and expect lifetime benefits. We need to re-plan our financial investments from time to time. For example, when we are in our 20’s, owning a car can be our financial goal, but as we grow up, we set higher goals. Financial planning should be modified according to our changing demands.

Thus, with proper guidance and planning, we should invest in mutual funds and enjoy the financial benefits from time to time.

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