Investment in mutual funds could be encountered in numerous shapes and sizes. Certain options are the low risk investment ones such as the debt funds, while the others are equity based funds which turn out as riskier. Then you have the hybrid funds which offer a much balanced portfolio. So in case you are planning to invest within the boundaries of mutual funds, then there are various parameters which you must consider. But yes, in case you are willing to start off with just a small amount every month, then no other fund could actually be more beneficial than the mutual funds.
One of my friends Sheela has always been quite indecisive about her savings and investment habits. Unlike her, her husband has been extremely conscious about his earnings and future prospects after retirement. She was earning quite well, but the habit of not calculating the expenditure and planning off for her future prospects made her fall into a big dump. As soon as they were reaching the phase of retirement, both her husband and her children made her realize that what a big mistake she has made. On the other side, her husband who spent 20 years of his life investing small amount of Rs.1000, SIP every month, got rewarded with a huge amount of 7.6 lakhs (No inflation) which was quite enough for the survival of two.
However when you count off the expenses which occur in a joint family, the amount was not enough at all. Their youngest child was still in his graduation period, when they both retired. Adding the further education requirements with the medical expenses and other such ones, they definitely had to face a huge crisis in the meantime.
Investment is solely essential, no matter how much amount you put in it every month. Even if you feel scared about the fluctuations and risk factor, you must always hold on to your investments. Even a small amount like that of 1000/- every month, made Sheela's husband, create a good corpus for the two of them. However, if she would have used her money in doing the same, then life would have been extremely comforting for them.
Let's just consider that, if Sheela must have made a smart decision and joint hands with her husband in making the investment, then what would have been the scenario?
When her husband was spending 1000 on his investments, let's assume Sheela too, planned to invest Rs.1000/- each month and they both did it for one enhanced period of 30 years. further calculations are as follows-
Thus, if Sheela would have made a smart choice and cut off her expenditure just by Rs.1000/- every month, both of them would have gained a sum of Rs. 70,00,000/- at the end of their maturity period. This is not just a huge corpus, but is more than enough for one whole generation to survive. Thus , you never know how just a small amount of Rs.70/- each day, can make you earn about Rs.70,00,000/- without even cutting down on your everyday requirements.