Monday, September 16, 2013

Why invest in the mutual fund?

Investing differs in style, there are people who wants to invest directly in the stock market and by all means, please go ahead, it is also a good way to grow and build wealth!

I want to share my investing style (and mostly of my friends). My investing style is through the mutual fund, let me give you some advantages of the mutual fund and how it works.

See this picture above? Let me explain it a little. Year 1 to 36 shows how long we invest the money. Traditionally, most financial institutions give at least 4% a year in return while the mutual funds, at least 12% a year in return. (Depends on market movements)

Now you have 100, 000, if you invest it on 4% a year, after 36 years, it will grow to 400,000! On the other hand, if your 100, 000 goes to the Mutual Funds earning at least 12% a year, after 36 years, it becomes 6.4 million!

Okay, so there are 2 ways to earn the 6M. First, you can work for it, so if you earn 300, 000 a year, you have to save that for 20 years! That would mean no eating, no taking a bath, no fare, nothing!

The other way to earn the 6 million is either to invest 100k at 12% or invest 1, 000 per month at 12 % and after 36 years, you still get 6 million. This my friends is the power of compounding interest. How would you like to earn the 6 million?

Friends, this is how some of our financial institution works, they take your money as your savings, they give you 1% - 4% a year but they invest your money to somewhere higher. You get 400, 000 and they get 6 million!

Start investing and earning smartly now! How? Invest in somewhere higher, I invite you to invest in the mutual funds, you can start investing with 5000 Pesos and with that, you journey to reaching your financial goals begin!

Have a successful journey!

God bless you!


Robin LaviƱa said...

Nice Neil, I learned from it.