Recently I have been watching a lot of reels on saving money using Mutual funds. There are many mutual funds available and picking the right mutual fund is very important to make sure it is performing well. I have a small amount of money invested in Mutual funds and some money in Bank fixed deposits just to be safe about my investments. I recently saw a video where they say saving the money in mutual funds can take care of the complete educaation needs of a child.
The idea is to invest 10 Lakhs in mutual funds when the kid is born. This way when the kid is at 5, the amount can give a decent value that would be suitable for starting the education for the kid in their Kinder Garden. Later as the money requirement increases, the compounding also increases and this way we will be able to withdraw more money from the mutual fund making sure the kid is completely covered for the educational expenses. A simple calculation done with this gives a better idea as to how much money exactly we would be getting.
Picking the right mutual fund
Picking the right mutual fund is crutial here because not all the mutual funds are top performing funds. Some people just save the money in banks and watch them grow or make sure that they have saved their future. Some mutual fund might give high returns but they might as well have high risks. Picking a mutual fund that has moderate risk and is performing well for a decent amount of time is a good thing.
Withdrawing at the right time
If we speak to many people, mostly people just invest in the mutual funds and don't think about taking the money out of withdrawing the money. I recently installed an application through a referral from an instagram reel where it suggest if the mutual fund that I'm holding is a good one to hold or not. If the mutual fund is not performing well, maybe it is good to get rid of it and invest on something that is performing better. There are many such applications available where we have to just enter our pan card number and it would analyze our portfolio and tell us the status of the mutual funds that we have. These applications also suggest good mutual funds to invest and they inform us if the mutual fund is performing well or not performing well. This way we will be able to adjust the portfolio.
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