A millennial’s guide to Investments & Mutual Funds


Do you want to start investing, but don’t know how to? Do you want to understand how mutual funds work? Here’s a quick and easy primer from a brand that wants you to save, invest & prosper!

You might be an adult now. But we all know that it’s not the easiest thing to be.

Adulting might be forcing you to deal with things that you were never taught back in school. You may have to figure out a monthly grocery list, or just maybe living from one paycheque to paycheque. You’re just now figuring out that you’re supposed to learn things as you go along.

If you could relate to all of that, chances are that one of you biggest challenges might be learning how to manage & handle your money. This does not mean just saving your earnings, but also growing it. What if we tell you, investing your money is just as important as saving it, and yes, there’s a big difference between those two.

Investing lets you grow your money, so that you can live comfortably in the future. And have enough money for all your dreams.

You may believe it’s not an urgent matter and that it’s way too complicated — plus, you don’t have the money to spare.

We know what you’re thinking, this is not an entirely urgent matter. Investments are complicated. Plus, you maybe don’t have the money to spare.

Well, if the world of investments is overwhelming for you just as much as figuring out the difference between Instagram & Snapchat, we’ve got the best type of investments for you- Mutual Funds.

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How do I invest? How do mutual funds work? 

I don’t really understand what mutual funds are.

Most people, young and old, hardly have any idea how to invest & where to invest. But the good thing with mutual funds is that you don’t have to do the hard work. You don’t have to monitor the markets constantly, or try and figure out the trends.

How does it work then?

Mutual Funds work this way: your money is pooled with those from other investors. A professional fund manager uses these funds to purchase the bonds and stocks from various other companies. This allows for diversification of investment by investing in a wide combinations of assets.

(Read here for our guide to all mutual funds terms)

Not only is the risk of losing money minimised, since you won’t be investing in just one thing, the chances of getting better returns is high.

How do I know I have enough to invest?

I don’t earn a lot of money.

Finding the money to invest is a difficult task. What after paying all the bills, and specially after you’ve just started working.

But what if we tell you, you don’t have to shell out a large amount of cash to invest in mutual funds!

But you don’t have to shell out a lot of cash to invest in mutual funds.

The minimum amount to start investing in mutual funds is Rs 100. Yes. Really.
You can start investing in a SIP (Systematic Investment Plan) with as little as Rs 500/month and build wealth for your future.

Multiple apps and websites exist to help you automate your investments. Much like Sqrrl, which invests your spare change automatically so you can save while you spend. Sqrrl also takes care of  your other investment needs & tax saving as well.

What all of this means is that you never have to worry about timing the markets when you invest in mutual funds. It is really that simple. You can check out how simple it really is to invest in mutual funds by downloading our app!

How do I earn from mutual funds? Can I earn in short term? 

You’re earning an income, and you do deserve to enjoy it. Whether you want to spend your hard earned money on a Netflix subscription, or a music festival, or your next trip to Europe.

All you have to figure out is how much duration you’re looking to invest your money for.

There are different investment horizons for different types of mutual funds. You can split your investment between three durations, and pick the type of mutual fund accordingly.

1. Money Market funds: Short-term
2. Bond funds: Medium to long-term
3. Equity funds: Long-term

You can invest in one or split your investments between all three. Create a portfolio which contains money market funds, bond funds, and equity funds.

This way, you can cash in the returns from your short term investments. And leave the others to grow in the long term.

How will I be able to track my money? 

Since you are a beginner investor, it becomes mighty important that you know where your money is invested. However, if you take on the investment process yourself and go directly to the mutual fund site, you’ll have a thought time keeping a track of all your investments.

But guess what, you can use an online platform like Sqrrl and keep a track of your money, right from the dashboard!

When should I start investing? 

Well the best time to invest, was yesterday. The second best is today.
The sooner you start investing, the higher potential income do you stand to earn.

(Click here to read about things you need to know before you start investing with Sqrrl)

We know being an adult is a struggle, but managing your money doesn’t have to be. What’s important is shaking off the stigma around investments and realising that it is not as tough as it is made out to be.

Now, you know you need to start investing for it. It’s good to enjoy your hard-earned money now, but don’t forget to look out for your future self, too.

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We’re hoping that by now you’ve got a comprehensive knowledge of how mutual funds work and how they can help you save & grow your money. Let us now introduce you to our app, which is quite frankly India’s simplest mutual funds investment app. We were recently featured by Outlook Money, for our quest to help Indians and specially young Indians save, invest & prosper.

Our app is designed to help all people invest, regardless of whether you have an intricate knowledge of mutual funds or not. Setting up a SIP, or setting up a future investment like planning a vacation, retirement fund, etc. can be done with Sqrrl in minutes. And don’t you just take our word for it, we’ve got little demos of the app here, go through them and tell us what you think.

You can click here to download our app.


 

Written by

Vedant Kaushik