How Couples Can Invest In Mutual Funds ?

 

4 Things That Couples Should Keep in Mind While Investing In Mutual Funds

If you are married, you may spend a lot of time with your better half, helping them solve their problems, planning vacations or just relaxing at home.

However, couples also need to discuss investments as well. And, mutual funds are a popular investment option.

This article will look at the four main aspects that couples need to take care of while investing in mutual funds.

Do you want to maintain a joint account or an individual account?

You can use a joint account or a regular account to invest in mutual funds.

Many mutual fund platforms provide mutual fund joint holding accounts. You and your spouse must both be KYC compliant to invest under a joint account.

However, keep in mind that if there are any ELSS funds in the portfolio, only the primary account holder would be eligible for tax benefits.

How do you want to take care of goals?

The second factor to examine is your objectives. Goals help you to understand why you're investing in the first place. And, because you're investing as a couple, you'll have two types of goals: your joint goals as a couple and your different individual goals.

Examples of joint goals

• Purchasing your first home
• Saving money for your children's college education
• Putting money aside for retirement

Examples of Personal goals

• Creating your home gym 
• Investing in a high-end camera to pursue your photography passion
• To increase your professional possibilities by taking a course or going back to college

There are two ways to tackle joint goals: Investing together and separately. 

The first technique allows you to pool your resources and invest in a common objective. For example, if both of you are saving for retirement, you and your spouse together would buy three high-performing equity funds. If you own funds 'A' and 'B,' your spouse might invest in 'C' to supplement your portfolio. If the funds overlap, then you or your spouse can trim some of the holdings. 

You and your partner can pursue separate goals in the second strategy. You can, for example, invest in your child's schooling while your spouse invests for retirement. Because you and your spouse are investing for distinct purposes with this technique, it isn't a big problem if your portfolios coincide.

If you are investing for the same goals, keep an eye for portfolio overlap with your spouse

If you and your spouse are investing for the same goal, the funds must complement each other. It's because too many similar funds, after a certain point, don't add much to diversification.

Assume you have three large cap equity funds A, B, and C in your portfolio, and your spouse has three additional large cap funds, say schemes D, E, and F. If this is the case, diversification will not affect your portfolio.

Reach a mutual consensus for financial goals

It is natural for two people to have opposing view points on specific issues. Similarly, your partner may have different plans for specific significant financial goals in your life, such as retirement or a child's schooling. Assume your partner desires a luxury retirement, however you want a conventional or frugal one. These factors influence the amount of money needed for both of your retirement goals.

As a result, it is critical for you and your partner to communicate the visions for various financial goals in your lives to reach a mutual consensus and effectively plan investments to achieve common goals.

Conclusion:

Investing together as a couple can be tricky. So, it is essential to find a middle ground that can help fulfil the common financial goals. This post discussed the top four aspects that you need to consider as a couple when investing in mutual funds.

This blog is purely for educational purpose and not to be treated as an personal advice. Mutual fund investments are subject to market risks, Read all scheme related documents carefully.

Next Portfolio 

www.nextportfolioindia.com

Lage Raho

 

LAGE RAHO

Have you seen how somebody rides the bicycle?

One word that I would like to use to describe the motion of a bicycle is 'continuous'.

The rider has to cycle continuously to ensure his balance is not lost and that he moves towards his goal or destination.

If he slows down, his balance is lost and he falls coming to a grinding halt.

Likewise, even in personal finance, it is crucial that our SIP is sustained all along the investment journey. Stopping the SIP is like breaking the momentum and weakening your resolve towards attaining one's goal.

SIP is like physical exercise. We have to do it regularly and have to show patience for the results. One cannot expect to see results after every round of physical exercise.

Same is the case with SIP.

The more we make it a part of the subconscious, the better it will serve us.

NEXT PORTFOLIO 

www.nextportfolioindia.com

Bonsai

Bonsai

If a healthy seed of a giant tree is planted in a flower-pot, the tree that will grow to be a miniature version of the giant tree. This miniature version is known as bonsai.

It is not because of any fault in the seed, because there is no fault in the seed. It is only because the seed has been denied the real base to grow on.

In personal finance when you give your investments just a few years of "time" your base is like a small pot and the investment will mushroom into a bonsai.

But by providing the "investment" 10 to 15 years of "time", you change the base from a pot to a field.

Now the investment gets the right kind of base to compound and create enormous wealth.

Next Portfolio

www.nextportfolioindia.com

Investment Lessons from Holi

 

 

Investment Lessons to Learn From Holi

Holi is a festival that we all eagerly wait for, and it is almost here. It is one of the best times of the year to meet and enjoy the day with friends and family. Holi is incomplete without colours and sweets and it celebrates the win over evil. If we compare Holi with our financial life, we see that there are many investments lessons that we can learn from Holi.

Here are some four key investment lessons that we can learn from the festival of colours.

Importance of a diversified portfolio

Holi won’t be Holi without colours. The colours make this spring festival vibrant. Similar to Holi, our investment portfolio also needs colours. The different investment assets such as equities, debt and gold are the main asset classes that colour our portfolio. It helps us to give optimised returns as it reduces the risk associated with a single asset class. Different asset classes play different roles and give different returns at the same time, which helps to minimise the risks.

So, try to maintain a diversified portfolio with different assets as per your investment objectives and risk-taking capacity.

Safety comes first  

Most of us love to play with varied colours. But sometimes some colours may be harmful for our body and hair. In such circumstances, it becomes important to take safety measures.

Investment is no different. Before you invest in riskier assets like equities to achieve your financial goals, it is important to build an emergency fund to take care of unexpected expenses. An adequate emergency fund with at least three to six months of expenses can help you navigate situations such as job loss, car and house repairs among others. Liquid fund which is a type of debt mutual fund invests in low-risk debt securities is one of the best options to build an emergency fund.     

Get rid of the evil

Holi signifies the triumph of good over evil. Holi gets the name from Holika Dehan where Holika was killed in a fire whereas Prahlad, a devotee of Lord Vishnu came out unscathed.

During your investment journey, you may have invested in products that do not suit you and damage your finances. Mixing insurance with investment, investing in schemes that haven’t performed in a while or investing in a high-risk product beyond your risk tolerance are some evils that you may have accumulated throughout the course of your investment journey.

Portfolio evaluation can help you figure out the laggards and evils in your portfolio and weed it out. It will help your investment portfolio to be better aligned with your financial goals.

Be Patient

Desserts such as Gujiya and Thandai are Holi staples. Gujiya is not Maggi and it requires a lot of effort, planning and most importantly, patience.

Patience is also important in the world of investments. Staying patient and disciplined over a long period of time builds wealth as time is a crucial component in the compounding process.

Focus on your financial goals and don’t let short-term movements in the market wreck your goals. If you are getting cold feet because of market volatility, talk to us to help you figure out the best course of action for you. 

Portfolio diversification, being prepared for the unexpected, deleting the harmful aspects and being patient are some of the investment lessons that one can learn from Holi.

This blog is purely for educational purpose and not to be treated as a personal advice. Mutual fund investments are subject to market risks, Read all scheme related documents carefully.

www.nextportfolioindia.com

Shant Investment Plan

 

Shant Investment Plan

An old farmer and his grandson lived on a farm. One day the grandson said, "I try to read the Bhagavad-Gita just like you but I don't understand it much. And whatever little I understand, I forget it very soon. What is the use of reading this book?"

The old farmer quietly turned from putting coal in the stove and said, "Take this coal basket down to the river and bring me back a basket of water."

The young boy did as he was told, but all the water leaked out before he got back home. The farmer asked him to try again, and again. But every single time, the water leaked out of the basket before he got back to the house. Finally, he said exhausted, "See Grandpa, it's useless!"

"So you think it's useless?" the old farmer said, "Look at the basket." The boy looked at the basket and for the first time realized that the basket had been transformed from a dirty old coal basket to a new clean one, inside and out.

Investment Lesson

Similarly investors who start their SIP don't realise its virtues (benefits) initially.

But nurture it with patience and discipline and over a period, the benefits of SIP will emerge just like the sun emerges at dawn brings light and prosperity to our lives.

SIP always rewards people with discipline and patience by providing delayed gratification.

www.nextportfolioindia.com

Keep It Simple

Wealth gets created by keeping things simple.

1) Invest regularly : like regular morning exercises builds health, regular investing builds wealth.

2) Make it a marathon : 'Being regular' is vital but what is even more crucial is being regular for very long (for 10, 15 or 20 years)

3) Knowing Less is More : What is important to remember is invariably wealth creation is inversely proportional to common market knowledge.

Just like incomplete knowledge of medicines can be damaging to health, similarly little knowledge of markets does more harm than good.

In fact it would not be inappropriate to say that one can create wealth by knowing less. The more you think you know, the higher the probability of going wrong.

This is because 'nobody' really has seen the 'unseen' and even if you guess it right once it is not sustainable. This path is fraught with failure.

Little knowledge means our wealth is at the mercy of speculative thinking.

With little knowledge we may win some battles that would subsequently get balanced by excruciating defeats.

Instead staying invested oblivious of the surrounding noise is a better strategy for wealth creation.

Start early, start small, stay invested for long, be lazy, be ignorant, stay stubbornly invested.

This is the path that leads to wealth creation. 

Next Portfolio

www.nextportfolioindia.com

                        

Investment requires discipline

 "If you don't see yourself as a winner, then you cannot perform as a winner"

"Having a dream is what keeps you alive. Overcoming the challenges make life worth living"

A mountain...it represents both a high point and a low point. And even climbing a mountain, there will be moments where you are going up, and then need to change direction and go down in order to continue to the peak. Don't get stuck in the place. Change your mindset. Keep moving. Take decisive action eventually to reach the peak.

Same is with equities, stock markets have cycles both up and down and neither the brokers nor the investors can predict them. The stock market and Government lawmakers will continue to be unpredictable. Don't panic in adverse market conditions. Understand volatility for better returns; this trade-off is a good one for long term investors. Ride out the volatility. Volatility seems to have become the norm for the markets now. Great investment opportunities arise when excellent companies are surrounded by unusual circumstances that cause their stock to be undervalued.

Understand equity markets; follow the growth of the economy. If the economy is doing well or has the potential to do well with many favorable factors, then the equity market will go up in the long run despite volatility. Investment requires you to take the emotion and guess work out of your actions. It requires discipline. 

Speak to your Financial Distributor today. 

Invest wisely.

www.nextportfolioindia.com