The Wealth team asks working professionals what they do with their salary -- how they save it, how they invest it. As part of this series, Wealth spoke to an investor who invests in everything but mutual funds.
NAME: Adarsh Shetty
Age: 30
What I do: Web designer
Where I stay: Mumbai
Adarsh Shetty is your friendly boy-next-door. He is a web developer with a media company and a keen investor.
Here is how much he sets aside to invest every month:
ICICI Prudential life insurance scheme: Rs 2,000 per month
Public Provident Fund: Rs 6,000 per month
Investing in equity shares: Rs 10,000 to Rs 12,000 once every two months
The first question that comes to mind is, why no mutual funds? He says, "I have no money to invest in mutual funds."
Huh?! He invests Rs 12,000 every two months in equity shares. Why does he have no money to invest in mutual funds?
He explains, "As and when I have a few thousands saved, I buy some shares my broker recommends or on the basis of research I try to do on my own. But you need an initial amount of at least Rs 20,000 to begin investing in mutual funds, isn't it?"
Absolutely not, Adarsh! You can invest in mutual funds with a sum as low as Rs 500 per month.
"What? Where? How?" he asks.
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This is how
i. You need to keep investing regularly every month, month after month.
ii. You can't expect your money to double or triple in few weeks or months.
iii. You can't think of withdrawing your money for at least five to seven years.
"Yes, yes, yes," he nods and says, "I look at it this way. If I didn't invest this Rs 500 every month, I would spend it on some useless expense, maybe a movie or a meal out. The money is gone anyway."
That would be a good way to look at it, yes. And then we tell him how he can invest Rs 500 per month in mutual funds.
Mutual funds offer an investing option called Systematic Investment Plan. Under this, you can choose a scheme, either equity, debt or balanced and invest a fixed amount (minimum Rs 500), on the same date every month (minimum six months).
This is how Adarsh can gain
i. You need not wait for a few months to gather your savings to invest.
ii. Without feeling the pinch, over a long period of time, you would have invested a substantial sum that would also be growing and generating returns.
iii. You don't have to spend time on research or talking to your broker. At a fee of two to 2.25 per cent, your fund will be managed by the best fund managers in the country.
How do YOU invest your money? Do you, like Adarsh, believe mutual funds are not for you? Are you a stock market player? Or do you prefer being conservative? Share your story with us. Mail us at [email protected] mentioning your name, age, profession and the city you reside in. We would love to hear from you!
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