There is a growing trend amongst Indian investors to capitalise on Mutual Funds (MFs) lately. Mutual Funds are the cheapest and safest instruments to speed up wealth creation over the years. An investor cannot be charged more than 2.75% (approx.) by an MF scheme as per Securities and Exchange Board of India (SEBI) guidelines.

While investing in an MF scheme, an investor bequeaths her/his wealth in able hands of expert fund managers with tremendous experience in markets. Moreover, owing to stringent regulations in MF sector in India, the fraudulent practices are lesser.

Investing in an MF scheme for long period also rewards higher returns as compare to a riskier instrument. Financial experts say that patient investors reap maximum rewards in MFs. Investing in MFs can surely help a financier beat inflation. It is advisable to invest in MFs to accelerate wealth creation.

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Why do you need a Life Insurance cover – to give you returns over the years ahead or to cover your life in the unfortunate event of your demise? Experts vary in their opinions, so do the man on the street. With every Indian Life Insurance company heavily promoting their Unit Linked Insurance Plans (ULIP), which are a combination of investment and risk coverage, it isn’t wrong if a layman feels that a Life Insurance cover is mainly meant for generating inflation beating returns.

But is that all about  a life cover?

Have you ever thought how your spouse will pay the EMIs on your outstanding home loan if you pass away tomorrow? Or for that matter, how your kids will complete their education in your absence? This is where the importance of a Life Insurance policy comes into play.

If your life is adequately covered, you can go about your days in peace that your family will never bear the burden of your loss financially.

Do you have the right cover?

Life Insurance experts say that for a young man, the Life Insurance cover should be ideally 10 times his Annual Income plus the liabilities (outstanding home loan, car loan and so on). Once you have decided your Life Insurance cover, what you need to do is to login to any of the portals of Life Insurance companies and check the Term Insurance premium calculator.

Term Insurance is the cheapest form of Insurance in India and covers only your life. In other words, a simple Term Insurance policy does not have a Maturity value. However, in case you wish to have decent returns on Maturity date, Life Insurance companies also sell Term Insurance policies which give you back the premium paid by you along with a reasonable interest.

Misfortunes can happen anytime. Check Term Insurance premium calculator today and get yourself covered. Don’t your near and dear ones matter to you?

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If there is one mantra for retiring rich, it would be – start small and early. The earlier you start saving and investing money, the higher will be the corpus.

Still doubtful?

Let’s consider the case of 30-year-old Ravi. Assuming he saves and further invests Rs. 5,000 every month for the next 30 years, his corpus at age 60 will be around Rs. 3.6 crore! (Assuming returns of 15 %).

A CRISIL study found out that Equity Mutual Funds have even given annualized returns of 23% over the last 17 years, thus even beating the CNX Nifty in terms of annualized returns by 10%.

Now, consider the case of Mohan, who is 20 years old. Assume he also saves and further invests Rs. 5,000 till he turns 60, i.e, for 40 years. Can you imagine what his corpus will be on retirement? It will be around Rs. 15. 70 crore. (Assuming 15% returns). This can be easily calculated by the Power of Compounding Calculator.

At retirement, Mohan will be richer than Ravi by Rs. 12 crore because of the power of compounding. Albert Einstein even termed this power of compounding as the eighth wonder of the world. He further said that those who understand this power earn money, and those who don’t, pay for it.

Which category do you want to belong to?

Decide how much money you can save every month, login to the portals of any leading Financial Services company and check their Power of Compounding Calculator and further invest in any of the Mutual Fund schemes of top performing Fund houses.

Let’s not regret during the autumn years.

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The National Pension Scheme (NPS) is going great guns. At the beginning of October 2014, the scheme had 7.44 million subscribers. Not to be left behind, the Assets under Management (AUM) of National Pension Scheme has risen to Rs. 63,511 crore. With the increasing AUM, the fund managers of the scheme have also changed their approach to equity exposure. Over the last 6 months, the equity exposure has been close to 14% (the maximum permitted exposure is 15%), up from 8% in March 2014.

The sudden shift

One could think as to why the fund managers of National Pension Scheme India are now betting aggressively on equities, while they were playing safe till 6 months back. The media attributes it to the lack of clarity around Mar’ 14. The elections were approaching and the fund managers were unsure of how the stock market will react to the election results. With a new stable Government in place and the Sensex too responding positively, the fund managers of National Pension Scheme decided that the time was ripe to increase the equity exposure.

Returns are pouring

This calendar year, the National Pension Scheme has even beaten the benchmark Nifty in terms of returns. With the regulator, PFRDA, seeking tax sops for NPS, its attraction is only set to increase over the years ahead.

Are you in?

There is a common misconception that National Pension Scheme is only for the Government employees. However, the fact is that from May 1, 2009, this pension scheme was thrown open to all citizens of India, between the age of 18 and 60. In case, you wish to invest in NPS, all it takes is to approach an approved Point of Presence (POP) service provider. The PFRDA has authorized many banks, financial organisations and the Department of Posts to act as POP for National Pension Scheme.

Start your retirement planning at the earliest and what better than National Pension Scheme India to start with.

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Where should one park his/her savings? Invest in Mutual Funds or walk in to the nearest bank to start a fixed deposit?

Most of us will choose a fixed deposit in a scheduled bank over Mutual Fund investment, the simple reason being that the returns from fixed deposits are constant.

It isn’t true

The Fixed deposits in banks might give one close to 9% interest. But when you factor in the rate of inflation, which was 6.5% in the month of September 2014, the actual rate of returns from your investment in Fixed deposits will be less than 3%. Seems astounding?

But what about Mutual Fund investment?

A study by a leading Asset Management Company (AMC) found out that equity funds have given an annualized return of 23% between April 1997 and September 2014. Some growth funds have even given investors annualized returns of 27%. The striking thing to note here is that even investing in CNX Nifty stocks would have only given an investor annualized returns of only 13%.

The retail journey

How will a retail investor get the right advice for Mutual Fund investment? The right advice becomes more crucial in case of investors with limited knowledge of Mutual Funds. Following are some of the factors which you should look in a Mutual Fund distributor before you invest in Mutual Funds:

•    Years of experience of the distributor

•    Capability of the distributor for to service you post your investment

•    Educational qualifications of the Mutual Fund distributor

•    Testimonials from earlier customers of the distributor.

Don’t let your savings earn lower returns by investing in Fixed deposits. Find out a trusted distributor and invest in the best schemes of top performing Mutual Funds.

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