Mutual Fund Course

Consistency is the secret sauce to building wealth

And it's not too difficult to follow in the investing world

Consistency is the secret sauce to building wealthAnand Kumar

dhanak हिंदी में भी पढ़ें read-in-hindi

You need time; you need consistency to create wealth.

Just like Sachin Tendulkar didn't decide to wake up one fine day to score zillions of runs in his career, we'd need to give our investments time and space to breathe to make it big.

So, let's take a quick look at what you'd need to do to build wealth.

Start investing every month

Now that you know which mutual fund/s to invest in (Chapter 5), we highly recommend you start investing ASAP.

Even if you want to invest Rs 500-Rs 1,000, start investing that amount monthly, because time and consistency can turbocharge your wealth, as explained in Chapter 2.

You can do this through the systematic investment plan, popularly known as SIP.

SIPs allow you to invest a fixed amount in a mutual fund regularly.

Once you agree to an SIP, that amount is directly debited from your bank account every month and invested in the mutual fund of your choice on a specified date.

You can think of it as an EMI, but a good one!

SIP vs Lump sum

Lump sum allows you to invest all your money in a mutual fund in one go.

However, SIP gives you consistency, and other benefits.

Let's say you invest in one go, and the market stumbles. You may get scared by market volatility and run away from equities for life. This would ultimately harm your wealth creation goal.

On the other hand, SIP will help you buy fewer mutual fund units when the markets are expensive (as the fund's NAV would be high) and likewise more units when the markets are down, so your cost gets averaged out and available at a lower price.

In short, SIPs help reduce market risks and provide options to invest small amounts of money each month.

Continue for at least two to three years

Give your investments time.

This is the last and the most critical step in your 'get started' plan.

Since markets are volatile over shorter periods, you should ignore the wild swings and stay invested.

Do you know why Warren Buffett is considered among the greatest investors of our time?

He has stayed invested in the markets for close to eight decades. Yes, eight decades.

If you think that's crazy, consider this: Buffett saw his wealth rocket more than 20 times in the last three decades alone, thanks to the power of compounding!

Now, we aren't saying you invest for eight decades right away. But three years is very much doable, right?

Please remember: DO NOT stop your SIPs or withdraw your money because of market highs and lows.

Three years is a good start, and this length of time can help you taste the highs and lows of the markets.

Once you taste blood (see the advantages of long-term investing), you will not need a second invitation to invest for even more extended periods.

For now, though, stay put and stay consistent. Don't get caught up with news articles, complicated jargon and other distractions. Just make a start!


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