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PersonalFN

How do you manage your finances?

Being financially independent does not mean depriving yourself of the freedom to pursue your goals in order to save money for the necessities of life. Rather, it is about finding a balance between affording what you need and what it is that you wish to achieve in your dreams; it is about being in control of your money rather than having it control you.

Why is it not enough to simply save?

Inflation eats up your savings over time! 

Putting your money in a regular bank account puts you at risk of inflation. The longer you wait, the more at risk you are compared to if you had invested the same amount in a relatively safe investment portfolio. During the observation period from 1960 to 2021, the average inflation rate in India was 7.5% per year. That means your savings will gradually lose purchasing power over time. Your money will be worth less in a few decades than it did when you first started saving.

What impact does inflation have on your spending habits?

The biggest cost of inflation is the loss of real income that comes from prices going up, which affects some people more than others in an inflationary environment.

For both those who receive and those who pay fixed interest rates, inflation can eventually affect their purchasing power. Consider retirees whose pensions increase by the same amount each year, say 5%. If inflation is greater than 5%, it will have a negative impact on a pensioner’s purchasing power.

“Investing: A hedge against inflation”

  • Start saving money; the sooner you start, the better.
  • Move beyond saving and into the reality of investing.
  • Rather than accumulating money as savings, put it to work.
  • You put in a lot of effort to make money. Spend your money wisely so that it can serve you well.
  • Make the most of compound interest’s impressive power.

What diverse investment opportunities are available?

Before making any investments, there is always the question of which type of mutual fund one should put their money into. This can be a very difficult choice. Which type of mutual fund is best for you: those catering to large, medium, or small caps; multi-cap; or sectoral funds?

A wise way to increase your wealth is through investing in mutual funds. Because they have the potential to produce returns that are higher than inflation, they can help you reach your financial goals quickly.

Most investors want fast, high-return investments without worrying about losing their initial investment. Additionally, many investors prefer to invest in low or no-risk investments.

MULTICAP FUND INVESTMENT STRATEGY

Being equity oriented fund, Multi Cap Fund has to invest predominantly in equity. The composition of Multi Cap Fund is as below

  • 25% in Large Cap Companies
  • 25% in Mid Cap Companies
  • 25% in Small Cap Companies
  • Rest 25% is also in equity depending on sole discretion of the fund manager

Since multi-cap funds are able to capitalise on investment opportunities across the market, they are typically considered to be better wealth creators than other categories of funds over the fund’s entire investment horizon.

Have your own odds-based investment system to beat the inflation?

TATA Mutual Fund has come up with a unique chance for you to explore investment in various market caps through its new fund offer, the “TATA Multicap Fund,” which is going to launch on January 16, 2023. It is an open-ended equity scheme that will invest in large-cap, mid-cap, and small-cap stocks, providing a disciplined tour around all market caps. The new fund offer (NFO) will remain open until January 30, 2023.

We look forward to a new investment with you this year.

Regards,
Ajay Kumar Jain,
CMD
Swaraj FinPro Pvt. Ltd.
+919993025625   (Call or WhatsApp)

Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

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