Wealth creation isn’t like instant noodles you can cook in a jiffy. It takes decades, patience, and a future-proof investment plan to build a large corpus. While there is no magic potion that will make you a ‘Crorepati’ overnight, there are certainly ways to reach there over time. Of those, the top five ways are discussed below.
#1 Start early
With wealth creation, you should begin early. Start as soon as you get your first paycheque, so your money gets ample time to multiply. The longer the investment period, the better are your returns. When you start young, you can reap the benefits of compounding.
#2 Keep aside an emergency fund
The savings first mindset works like a charm when it comes to MF investments. Unlike what many assume, investments and savings are not mutually exclusive. They, in fact, should go hand in hand. So when push comes to shove, you won’t need to liquidate your assets. Instead, you can use your savings corpus set aside for financial crises. So, if you don’t have one already, create a fund for emergencies today.
#3 Focus on your risk tolerance
You shouldn’t give heed to what your risk appetite should be like. Instead, focus on the risks you can handle well, i.e., your risk tolerance.
So, consider your obligations, income, liabilities, expenses, etc., to gauge the level of risk you can take conveniently and park your money accordingly. Yes, you need to take higher risks to earn substantial returns. But if your tolerance is low, you can start small and step up your investments as your incomes increases.
Say you get a 5% salary hike in a year. In that case, you can increase your MF investment by 5%. As your investment amount goes up, so will your profit margin.
#4 Invest via SIP
If your ultimate goal is wealth creation, you can think small. Yes, contrary to popular belief, you don’t need to invest large sums to earn profitable returns. With a systematic investment plan, you can periodically invest any amount you find comfortable.
You can periodically invest a portion of your income into mutual funds online and take advantage of the rupee cost averaging, which can help you eliminate the guessing game.
It will automatically buy more units when the market prices are low and fewer during bullish markets. Thus, smartly navigating the market volatility.
#5 Choose your funds wisely
With hundreds of funds to choose from, the selection process won’t be easy. To streamline the process, consider the following:
- Average returns
- Entry and exit loads
- Expense ratio
- Investment style and objective
- Fund performance
- Brokerage fees
Also, keep your investment objective and risk tolerance in mind to choose the right schemes for your financial goals.
To sum up
Whether you’re looking to build a retirement kitty or take a trip around the world, with strategic MF investment, you can make your dreams come true little by little.
Ready to invest? If so, you can start your investment journey with online investment apps like moneyfy app that are available today. From scheme comparison to trend analysis, you can get everything you need on these apps!