Investing in mutual funds depends on many factors, such as age at the time of investment, risk appetite, financial goals, tax management, remaining years of retirement etc.
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If you want to create a thick fund through mutual funds for your future, then you have to follow some methods. Only then you can get good returns by investing in mutual funds. Along with this, some tips for salaried employees can help in choosing the right mutual fund scheme. Mutual Fund investments work well for salaried individuals to achieve their financial goals. But often salaried individuals get confused while choosing mutual fund schemes as there are a lot of mutual fund options available in the market.
Investing in mutual funds depends on many factors, such as age at the time of investment, risk appetite, financial goals, tax management, remaining years of retirement etc. As a bonus to investing in lump sum in mutual funds, they should invest in multiple mutual fund schemes to reduce risk and achieve financial goals. Only then you will get full benefit.
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Take special care of these things
- You can choose from a variety of mutual fund investment options that can help you achieve your financial goals. Along with this, you can invest in Equity Linked Savings Scheme (ELSS) to save tax.
- ELSS allows an investor to invest in an equity mutual fund scheme and also provides the benefit of tax exemption up to a maximum limit of Rs 1.5 lakh in a financial year. Hence you can save tax as well as get better return on investment.
- Investors should invest in mutual funds through SIP mode to reduce the risk and get the benefit of rupee cost averaging in the long run. This keeps their money safe and there is no risk of any kind.
- Apart from tax savings, you also need funds to face financial challenges. Hence it is important for you to maintain an adequate contingency fund in the long run. In case of emergency, you can invest in short-term debt funds such as liquid funds, ultra-short duration mutual funds or arbitrage funds as the risk is less in these and you can easily withdraw money quickly without any hassle.
- There are many options in equity mutual fund schemes where you can invest money to get better returns depending on the risk. If you want high returns and are ready to take risk, you can invest in a small or mid-cap mutual fund or a large-cap fund scheme.
- Usually if you want to earn a fixed monthly income in your career. So you need to be ready to match each financial goal with your expected source of income. However, one can get a bigger fund on maturity of investments like FD, life insurance policy etc.
- You can make a lumpsum investment in a suitable debt fund as it carries less risk than equity schemes. Depending on your risk appetite and return expectation, you can choose a suitable debt fund. That is, to avoid risk, you can invest in a mutual fund that has exposure to short-term debt instruments.
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