Financial Independence with Mutual Funds this Independence Day
Why not commemorate India's 75th Independence Day this 15th August by taking concrete steps towards attaining the financial freedom that you've always dreamt of? But what is financial freedom?
In simple words, it is the ability to handle contingencies and manage expenses effortlessly to live life to the fullest without financial dependency on others. And yes, it is possible! All it requires is some careful planning coupled with prudent investment in mutual funds. So let's find out how mutual funds can get you started on this all-important journey of financial freedom.
Start Early to Finish Early
To build a financially strong foundation, it's vital to start investing as early as possible. It helps spread your risk and amassing a sizeable corpus through the magical power of compounding.
A portfolio with the right asset allocation strategy based on your risk profile can give you higher return potential to ensure a financially secure future.
Fulfil Financial Goals
Mutual funds that offer a multitude of schemes are designed to meet diverse financial aspirations. The popular asset class has something for everyone. You can choose financial instruments that align with your specific goals and risk profile. While debt funds are ideal for achieving short and medium-term goals, equity funds can help generate wealth over the long haul.
The importance of self-sufficiency in the twilight zone cannot be stressed enough. While the pension can take care of general expenses, a retired person must be prepared to beat the increasing inflation rate.
The Systematic Investment Plan (SIP) offered by mutual funds is a good bet. The facility that pushes you to invest in a disciplined manner can help build a retirement kitty without straining your budget.
Proper tax planning can help channelise a lot of your hard-earned money towards reserves for your future. Selecting the right investment avenue can lower your tax liability under Section 80C of the Income Tax Act. Mutual fund investments such as the Equity Linked Saving Schemes (ELSS), while it helps saving tax and help your money grow to fulfil your quest of becoming financially independent.
It's prudent to maintain a financial reservoir that can be tapped into if an unexpected situation such as a medical crisis or job loss were to emerge. Stashing idle cash in liquid and overnight funds is perfect for handling such contingencies as they are less prone to market fluctuations and easy to exit.
What's more, they can also earn a return. The short-duration securities provide liquidity to help tide over a challenging situation without fretting about sustenance or denting your egg nest.
This Independence Day Work Towards Your Financial Independence
What say, ready to make financial Independence a reality by taking the mutual fund route?
Happy Independence Day to All!
Mutual Fund investments are subject to market risk, read all scheme related documents carefully. This material is part of Investor Education and awareness initiative of UTI Mutual Fund.
The information herein should not be considered as 'investment advice'. Reader is requested to make informed investment decisions and consult their Mutual fund distributor or financial advisors to determine the financial implications with respect to investing in Mutual Funds.