If you are a salaried person, you might be deciding how much to invest in mutual funds ? and how much to save from your salary?.
In this blog, I will try to break down the process and go into more detail about the factors that affect how much money you can set aside for investments and how much money you can set aside for your home expenses.
Read on to learn more.
In general, you can use your income for three primary purposes : spending, saving for emergencies, and investing for the future.
As a general rule, if you decide to invest 40% of your income, 20% of it should be allocated to investments.
Choosing the exact monthly SIP amount can be challenging as you cannot change it due to changing priorities or because you cannot stop the SIP.
So consider the following points before determining the investment value:
1.Determine your goals
We all have financial goals and dreams that we want to save for, such as buying new things, saving for vacations, saving for retirement, saving for children’s education, etc.
What are your goals and when do you want to achieve them? Once this is known, it becomes easier to understand how much money you need to invest.
You should write down your goals and categorize them well as short medium or long-term goals. You can have many goals.
But you can cover some of them with your income. Thus prioritizing them and choosing the essentials after thorough consideration, once you have your final list, you can allocate your funds to mutual funds based on your goals.
As such, I can make you understand with an example :
So let us consider that there is a girl named is Achal this whose monthly salary is 50,000. Her monthly expenses are as follows :
Rent = Rs. 10,000.
Electricity Bill = Rs. 5,000.
Food and other Expenses = Rs. 5,000
Total Expenses = Rs. (10,000+5,000+5,000) = Rs. 20,000)
This is Total cost achal spend in 1 month :
Total income available for investments = Total income – Total Expenses = Rs. (50,000-20,000) = Rs. 30,000
Thus, Achal what amounts up to ₹30,000 for a SIP investment scheme
Suppose you have less expenses and more savings, you can reach your goals faster From Mutual Fund SIP.
2. Understanding Your Personal Financial Landscape
It is very important to understand your current situation before going for mutual fund investment.
You can start by calculating your total income. You can include all the sources from which you get your money.
Next you need to outline your monthly expenses. This may include regular expenses such as house rent, mortgage or debt etc.
For example, suppose you earn 50,000 per month and your fixed expenses are 30,000 so you will have 2000 which you can use for saving.
Knowing this is a very important step now that you can plan to invest some or all of it in a mutual fund scheme.
3. Why Should Invest in Index Mutual Fund
If you are new to the world of the stock market and don’t understand how you can start your journey So I want to tell you that you can start your journey in a very easy way by invest in mutual funds.
So initially some people have a question that there are many mutual funds and which one should we choose?
So I would like to answer you the question that we should choose the best mutual fund which gives good returns and You will give me good compound interest.
So today the best mutual fund you can get is index mutual fund and among them nifty fifty mutual fund in this mutual fund your money is invested in top 50 companies so your money is invested in safe company and so you get You can see your money getting stable returns and after few years you can see your money compounding.
So I started with Mutual Funds a few years ago and you want to start like me, Invest in Mutual Funds.
4. Mutual Fund For Goals Planning.
Now you can invest your money in many investments but the rest of the investments may be ricks but mutual funds are known as different investments and mutual funds are an ideal investment solution to achieve your goals.
You can use mutual funds and you will see some similar objectives and the most suitable mutual fund options to invest for these objectives.
1. Retirement Planning :-
It is usually a long term goal to invest money from now for the next future now in mutual fund but different types of equity mutual fund like large cap fund small cap fund etc. depends on the percentage of risk you can take and how much experience you have in investing.
Can invest in thematic or sector funds SIP is the best investment option for long term investment as you can benefit from the power of market compounding and through Rupee Cost Averaging you can also benefit from volatility which can make you more profitable.
2. Children’s Education and Marriage :-
This is also a long-term investment But it takes less time than retirement planning and parents don’t need to return much risk to their children’s goals Like large cap fund, index fund hybrid fund, aggressive equity, oriented hybrid fund, dynamic acid, allocation fund gold fund for (Child Marriage) etc.
Once your goal line is set and your goal time line is nearing, you can go for a dep fund before you risk some marriage related decisions of your son or daughter.
3. Saving For Vacation, Vehicle or Home Purchase in 1-2 Year :-
Debt funds like short term funds etc. are suitable for your goal if your goal is for short term i.e. less than one year then you liquid and ultra short term funds are more suitable investment options. If your target time horizon is a bit longer i.e. three years or more then you can invest in long term debt funds dynamic bond funds etc. which can also earn you higher returns and tax benefits as well.
4. Tax Savings :-
Mutual Fund Equity Liquid Saving Scheme (ELSS) to claim deduction from your taxable income and to save tax under Section 80 of the Income Tax Act can invest in You wish to claim deduction up to 1.5 lakh under Section 80 by investing in ELSS And can save up to Rs 46 thousand 800 in contract depending on your financial needs and can invest for medium term i.e. three to five years or long term more than five years.
5. How does the SIP target calculator work?
You need to input only four values while calculating SIP attention I will tell you step by step :-
- Target amount : The first value is the desired financial goal amount, the percentage of your salary that you can put into the SIP and the target amount that you want to achieve from your SIP.
- Existing investments : The second value is the amount you have already invested for your future that you enter ensures that you will not allocate more than necessary to your financial goals and you can enter zero if you have not invested anything towards your goals.
- SIP duration : The third value is the year for which you are depositing the rate or the check date.
- Assumed returns : The fourth value is the expected return you expect to get from the investment you have made. In those values you should remember that too high a return can be misleading as the reality may be far from it. You should keep your return expectations reasonable which will make the result of the SIP interest calculator more realistic and thus more useful to you.
Once you remember all the values and input the same, the SIP attention Calculator will help you a lot to know how much you need to invest every month to achieve your desired goal. There four invest in Mutual funds.
conclusion
So there is no right or wrong answer to the question of how much you should invest in mutual funds every month. Your investment amount should be based on the time it takes you to achieve the financial goals you want to achieve. You identify your goals, prioritize them and calculate how much you need to invest every month to achieve your goals. You can use a mutual fund return calculator to calculate your potential returns Investing first and then spending the remaining amount will help a lot.
But many people like me are benefiting from invest in mutual funds, you too can decide and invest in mutual funds You can achieve your goals by using.
FAQ
1. How do I decide how much to invest in mutual funds versus individual stocks?
This question is based on investor’s allocation in mutual funds which is diversified and individual stocks which are usually risky but if you are new to the stock market then you can look into invest in mutual funds.
2 How much of my salary should I save for retirement?
This question is asked by almost everyone as many people use mutual funds for post-retirement investment which focuses on long-term financial planning and the recommended percentage of income to be allocated for retirement savings. But invest in mutual funds is now the safest option for him