The Telegraph
Saturday , August 2 , 2014
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Mutual funds fillip to money

Earlier generations saved, people today want to make their money grow.

Prospective investors came to know about the benefits of mutual funds on Friday during “Investment Pathshala”, an innovative workshop held at a city hotel by ICICI Prudential Mutual Fund, in association with The Telegraph and ABP.

The workshop began with a skit in which four friends cleared popular misconceptions of investing in mutual funds and how it helps families.

Then, ICICI Prudential Mutual Fund east zone product head Harsh Saraswat, taking the help of audio-visual presentations and anecdotes drawn from life, listed investment benefits.

“People save for many personal goals or for emergencies. But, saving is not enough, simply because it is affected by taxes and inflation. In fact, rather than saving, making the right investment is necessary today,” Saraswat said.

He also shared a valuable insight — the “30-30 challenge”.

“Investors will spend 30 years to fund next 30 years of their life,” Saraswat said.

“Inflation has affected all walks of life and in the next 30 years lifestyle inflation will see a further increase. For example, school fees will increase by 18 per cent in next 30 years. In this context, saving will be eaten by taxes and inflation. It important to know where to invest.”

Stressing on the need to start investing early, as it pays more in the long run, Saraswat then cited the instances of two friends, one who made an SIP (systematic investment plan) at the age of 25 while the other spent his money in fun and parties.

“Ten years later, the one who had started investing early, stopped doing so, and enjoyed life. The other also decided to be disciplined in spending and invested 10 years later. But during their retirement at the same age of 55 years, the one who had invested earlier had more returns than his friend,” he said.

The audience also got comprehensive knowledge on mutual funds, including their pros and cons, direct investing and how to make money.

“Mutual funds have several advantages vis-a-vis direct investing such as professional management, portfolio diversification, convenient options and investment comfort. One has to take a decision on which mutual fund to invest in, depending on individual goals,” he said, adding it could be saving solutions, generation of income or long-term capital appreciation.

The workshop concluded with an overview of two different kinds of mutual funds in equity (wealth creation) and debt (saving solution) as well as tax benefits.

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