13 Jun Romance
Romance with FD but marry SIP
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Imagine you are moving at 10km per hour and your friend is moving at 11 km per hour.
After 6 minutes they are only 100 m (1/10th of 1km) apart which is not very significant. You can literally see each other.
After an hour you are 1 km apart. You can no longer see each other but still you aren’t all that far from each other. If you wish you can meet each other easily.
But after 10 hours you are 10 km apart and after 100 hours you are 100 km apart.
Now you are in two different cities. It’s too far to meet each other. Perhaps you have to speak over phone.
Likewise investing in a fixed deposit of 6% per annum or investing in a mutual fund of 10% per annum does not make a huge difference when invested for a period of 1 year or even for that matter for a period of 2 years.
However, if you were to invest for a period of 10 years to 15 years, the 4% difference but nearly 100%.
Hope this explains why even a 4% difference in returns cannot be ignored in the long term and moreover why Equity mutual fund is a more appropriate asset to invest in rather than a Fixed Deposit.
PRIYANKA S WANI
Posted at 06:35h, 13 JuneWell explained sir .This will really helpful us
Sivaramakrishna Movva
Posted at 06:38h, 13 JuneGreat & Woderful Comparison Sir
Kunal somani
Posted at 08:08h, 13 JuneThis is really practical example.. could be easily shared with clients.. thanks for your continuance efforts to bring new imaginations and energy every time..
Mohanraj
Posted at 08:09h, 13 JuneExcellent sir
Nitin agarwal
Posted at 08:10h, 13 JuneVery interested
Prabhakar Bembalgi
Posted at 13:40h, 13 JuneVery practical explanation.. Thanks
Upendra Sheth
Posted at 15:20h, 13 JuneWell explained and very good example.Would be very useful.
Upendra Sheth
Posted at 15:21h, 13 JuneExcellent.Thanks for sharing.
Prakash kumar Agarwal
Posted at 17:16h, 13 JuneVery good article to who do not want to know about the truth of mutual funds products.
Ganesh
Posted at 23:12h, 13 JuneVery much true
Jharna chaterjee
Posted at 05:00h, 14 JuneExample should like you had done…….simple narrative visible and for all, excellent.
India Tax Guide
Posted at 07:34h, 14 JuneVery Nice and Good Explained Article for Easy understanding