I wanted to take a moment to share some insights about mutual funds. They’re more than just an investment; they represent an opportunity for individuals like you to diversify their portfolio while minimizing risk. Mutual funds pool money from various investors to invest in a diversified range of assets such as stocks, bonds, or commodities, managed by experienced professionals.

What makes mutual funds remarkable is their potential for growth while spreading risk across different investment avenues. They offer a convenient way to access a diversified portfolio without the need for extensive market knowledge or individual stock selection.

Considering your financial aspirations and objectives, exploring mutual funds could be a prudent step toward achieving your goals. Whether you’re seeking long-term wealth accumulation or short-term gains, the flexibility and variety within mutual funds can align with your unique investment strategy.

Should you wish to delve deeper into this investment avenue or require further guidance tailored to your financial objectives, I’d be delighted to offer my expertise and support.

How a 10-Year-Old Can Become a Billionaire Selling Matchsticks (Seriously) | Story of 10-year-old billionaire

The Billionaire Matchstick Plan: A Thought Experiment with Fire

What if I told you your 10-year-old child could become a billionaire just by selling matchsticks? No Silicon Valley. No Ivy League. No godfather. Just matchsticks and math. Here is a story of a 10-year-old billionaire.

Sounds like a fairy tale, right?
Well, let’s light the first match.

Day 1: Just One Matchstick at Rs. 0.01

Let’s say the child sells 1 matchstick on Day 1. Each day, they double the number sold, charging ₹0.01 per piece.

  • Day 1: 1 stick → ₹0.01
  • Day 2: 2 sticks → ₹0.02
  • Day 3: 4 sticks → ₹0.04
  • Day 4: 8 sticks → ₹0.08
    …and so on.

Looks laughably small, right?

This is where most people give up. “This is peanuts.”
But keep watching. The matchstick doesn’t burn out. The math does.

The Power of Compounding: When the Joke Turns Serious

By Day 10, your kid sells 512 matchsticks, making ₹5.12.
By Day 20, they sell 5,24,288 matchsticks = ₹5,242.88.
Still small change for a billionaire dream? Stay with me.

Now comes the kicker:

  • Day 30: 53+ crores matchsticks sold → ₹53 lakh revenue
  • Day 40: 55,00,00,000 matchsticks → ₹5.5 crore revenue

And by Day 45, they cross the ₹1000 crore (or $120+ million) mark.

By Day 48, they hit the billion-dollar threshold.

So, When Does the 10-Year-Old Become a Billionaire?

Answer: On Day 48.
That’s just one and a half months of doubling effort.
From ₹0.01 on Day 1 to ₹8.9 billion on Day 48.
All hypothetical, of course. Because logistics would laugh in your face.

But the math works.

What’s the Real Lesson for You from 10-year-old billionaire?

This isn’t a DIY matchstick startup pitch for your kid.
This is about wealth building through compounding. Whether you live in India or the US, this principle is borderless and timeless.

What if you invested like this?

  • Instead of matchsticks, you put ₹1,000 in a monthly SIP.
  • You double your investment (not daily—let’s say every 7 years).
  • In 21 years, you’re sitting on 8x your starting capital.

The problem? Most people quit on Day 5 of their investment life.
Too slow. Too boring. Not sexy enough.

How can you be a 10-year-old billionaire if you quit so soon?

From a Child’s Play to Real Wealth: Compounding Doesn’t Judge Your Age

Whether you’re 35 in New Jersey or 45 in Nashik, the message is the same:
Start early. Stick with it.
Let compounding do the heavy lifting while you sleep.

Final Thought: You Don’t Need Matchsticks. You Need Patience.

Your kid won’t become a billionaire selling matchsticks.
But you might just create one by teaching them this principle.

Compounding isn’t a trick. It’s a test.
And very few have the patience to pass it.

This is how a 10 year old boy can turn himself into a 10-year-old billionaire.

The Cash Babu Gyan:-

Want to raise a financially smart kid or become a financially free adult?
Start your SIP today. Light the match. Let the fire grow.
Visit cashbabu.com for more such fiery finance wisdom!

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What If I Had Started SIP at 21? A 37-Year-Old’s Regret Amid Market Volatility and Salary Struggles

What if I had started SIP at 21?”

This one question hits me every time the market rises or falls. I’m 37 now. Middle class. Still stuck in the same loop of EMI, rent, groceries, and praying that the salary credits on time. And then I see charts on Instagram — “If you started SIP at 21, you’d have 1.2 Cr by 37!”

Great. Thanks for the math. Now what?

Back then at 21, SIP sounded like some boring old uncle’s advice. We were too cool, too broke, or both. And now? I feel like I’ve failed in life just because I didn’t start early. I see my mutual fund app now, and the graph looks more like a heartbeat during a panic attack — thanks to the market crash.

I don’t even blame the market. I blame the years I wasted thinking ₹500 SIP wouldn’t matter. But ₹500 a month from age 21 to 37 is ₹96,000 invested — and with compounding, it could be over ₹2.5–3 lakhs depending on returns. And ₹1,000 per month? That’s a lakh invested. Easily worth ₹5–6 lakhs by now.

And it’s not just about missed returns. It’s about missed financial confidence.
At 37, with a kid, aging parents, and a job that gives 4% hike when inflation is at 6%, I can’t afford mistakes.

Middle-class life doesn’t give you backup plans.

One hospital bill, one layoff, and you’re wiped out. SIP was never just about returns. It was about discipline, security, hope — all things I didn’t realize when I was younger.

The market today is shaky. Global news, elections, layoffs — it’s chaos. But you know what’s worse? Entering this chaos without a cushion. I’m starting my SIP now, yes — even at 37. But deep down, that regret stings: what if I had started SIP at 21?

But here’s the thing.

Regret is real, but regret won’t pay the bills. Starting now is still better than waiting till 40. And if you’re reading this, maybe you’re 27, 30, or even 45. Doesn’t matter. Start anyway. Market will fall, rise, fall again. But your consistency? That’s what builds wealth.

I lost 16 years, yes. But I’m not losing 16 more.

So to everyone feeling behind — you’re not alone.

You’re just a middle-class fighter like me, trying to fix today what we didn’t know yesterday.

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Power of Compounding using a SIP and Lump Sum Investment

Have you ever thought of SIP and Lump Sum investment?

Before investing in mutual funds, every investor has several important questions in mind. One of the most common and crucial among them is: Which is better—SIP or Lump Sum investment? This question arises not just for beginners but even for seasoned investors looking to optimize their returns.

According to a recent SEBI (Securities and Exchange Board of India) survey, the total number of mutual fund folios in India has crossed 1.94 crore, indicating the growing interest and trust in mutual fund investments. With more people entering the world of investing, understanding the right strategy becomes essential.

Both Systematic Investment Plans (SIP) and Lump Sum investments offer unique advantages and come with their own set of risks. Choosing the right one depends on several factors such as income stability, market conditions, risk appetite, investment goals, and time horizon.

In this blog, we’ll dive deep into these two popular investment approaches, compare their performance over time, and explore how the power of compounding plays a critical role in wealth creation through both strategies. By the end, you’ll be able to make a more informed decision about which path aligns better with your financial journey.

What is Sip?

SIP (Stands for Systematic Investment Plan) is a method of investing in mutual funds that requires investors to regularly invest small fixed amounts of money on a monthly or quarterly basis. The primary benefit of investing through SIPs is that these investors can average the purchase price of mutual fund units over a long period. This reduces the risk of high-value investments. This is considered a disciplined approach because investors make regular long-term investments.

What is Lump Sum?

A lump sum investment is when an investor invests a significant amount of money in a mutual fund. The advantage of lump sum investing is that when the market goes up, it gives very high returns in a short period. But this scheme is also very risky because investors invest large amounts of money at a time, and they can be easily calculated using the lump sum calculator for their estimated returns.

Some of the key differences between SIP and Lump Sum investments are given below:

An investment method sip = Some money is invested regularly at certain intervals.

Lump Sum = large amount of money is invested at once

 

Investment target

Sip = long-term target.

Lump Sum = short-term target.

Risk factor

Sip = low risk

Lump Sum = high risk.

Market conditions

Sip = good for volatile market conditions.

Lump Sum is good for bullish market conditions.

Cost Averaging

Sip=yes

Lump Sum= No

Timing the market

Sip = no

Lump Sum= yes

Flexibility

Sip= more flexible

Lump Sum= less flexible

Returns

Sip=Moderately high over the long term

Lump Sum Moderately high over the short term

Overall risk

Sip=lower

Lump Sum= Higher

Investment Horizon

Sip= long-term

Lump Sum= short-term

Choose sip investment if:

  1. You don’t have a large sum of money to invest upfront.
  2. You have the patience to invest regularly for at least 5 to 10 years.
  3. You have a regular monthly income source, like a salary.
  4. You want better returns than traditional savings accounts or fixed deposits.
  5. You want to develop a savings habit.
  6. You want to start with a small investment amount and increase it as your income grows.
  7. You have long-term financial goals, like retirement planning.

Choose lump sum investment if:     

  1. You have a large amount of money ready to invest
  2. You have the confidence to tolerate short-term market fluctuations.
  3. You are comfortable with the risk of investing a large amount of money at one time.
  4. You have a good understanding of the market timings.

Conclusion:

SIP and lump sum investments have their advantages and disadvantages. Investors who prefer small, regular investments and are risk-averse can benefit from SIP investments. This investment strategy allows for the cost-averaging effect, which reduces the impact of market volatility on investments. Lump-sum investments can be advantageous for investors with a large sum of money who want to invest it at once.

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How ₹3,000 Monthly in Mutual Fund SIP Can Grow to ₹1 Crore – No Magic, Just Math!

🤑 How ₹3,000 Monthly in Mutual Fund SIP Can Grow to ₹1 Crore – No Magic, Just Math!

So, you’ve got ₹3,000 a month lying around after your coffee, pizza, and random Amazon splurges? Great. Because with that small amount, and a little thing called discipline (yes, the D-word), you can make ₹1 crore through a mutual fund SIP.

Let me break this down like your broke friend breaks promises.

📈 The SIP Strategy – Not a Get Rich Quick Scheme

A mutual fund SIP (Systematic Investment Plan) isn’t gambling. It’s boring, slow, and brilliant – kind of like your uncle who retired with 3 flats and 2 pensions.

Let’s say you invest ₹3,000 every month into a good equity mutual fund. Historically, equity mutual funds have delivered an average annual return of 12% over the long term. No stock tips, no crypto FOMO – just calm, consistent investing.

⏳ But How Long Will It Take to Become a Crorepati?

Here’s what compounding does when you don’t panic and stick to the plan:

Monthly SIP Assumed Return Years Final Corpus
₹3,000 12% p.a. 30 ₹1.02 crore

Yes, 30 years. Not 3. Not 13. THIRTY. This is not Hogwarts, it’s finance. And the spell here is called “compound interest”.

The longer you stay invested, the harder your money works for you – like a salaried person nearing appraisal season.

🧠 What If I Want ₹1 Crore Sooner?

Alright, Mr. Impatient. If 30 years feels like a lifetime, you’ll have to up your SIP. Let’s see how much you need to invest monthly to hit ₹1 crore faster:

Years Monthly SIP Required (at 12% return)
25 ₹5,500
20 ₹9,000
15 ₹15,000
10 ₹27,000

See the pattern? Less time = more money out of your pocket now. Pick your poison.

💪 SIP Is Your Financial Gym – And Mutual Fund SIPs Are the Treadmills

Here’s the truth: most people start a mutual fund SIP and then stop it during the first market dip. Big mistake. The ones who ride out the crashes, the crashes that make headlines like “Bloodbath on Dalal Street!”, are the ones who become rich without doing anything flashy.

So if you want a future with no EMI tension, and where your retirement has more “Goa plans” and fewer “discount groceries”, then lock that SIP and forget about it.

💼 The Final Babu Gyaan

  • Start early. Even if it’s just ₹3,000.
  • Stick to your mutual fund SIP no matter what the market is doing.
  • Don’t treat your SIP like a gym membership you forget about – review annually, not obsessively.
  • Compounding is slow in the beginning and then suddenly amazing.
  • If someone tells you 30 years is too long, remind them you just spent 10 years scrolling reels.

💬 Final Words

Building ₹1 crore through a ₹3,000 monthly mutual fund SIP isn’t a dream. It’s just discipline, time, and letting compounding do its boring, brilliant thing. And if you’re thinking “30 years is a long time”, remember – your future self will thank you when your money starts working harder than you ever did.

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Compound interest for kids | 🐷 Warren Buffett Ne Bola, “Bacchon Ko Paisa Sikhado, Warna Paisa Unka Kha Jayega!”

 

Do you want to teach compound interest for kids?

You think your kid is too young to understand money? Ha! The same kid who can unlock your phone, order a Happy Meal, and watch 18 YouTube shorts in 3 minutes is definitely smart enough to learn money management.

Here are 5 underrated money lessons Warren Buffett would whisper into your ear if he saw your kid blowing ₹500 on stickers.

1. 💥 “Beta, Compound Interest Is Not a School Chapter, It’s Black Magic”

Warren Buffett didn’t become Warren “Cash Daddy” Buffett by saving ₹10 in a piggy bank. He let compound interest do its dark sorcery over decades.

Teach your kid that ₹100 invested monthly from age 10 can become a small fortune. But do it visually—apps, graphs, or draw rupees with a crayon. Whatever works.

Compound interest for kids is a natural thing that every child should learn at their young age. Let them make their hands muddy with money lessons. 

2. 💪 “No Work, No Paisa” — Make Them Earn It

Handing out pocket money like a vending machine? Stop. Instead, give them tasks—wash the cycle, clean up toys, help grandma with her WhatsApp DP. Let them earn money, not just receive it like a spoiled IPO stock.

Money management for children is now a days a necessity not subject.

3. ⏳ “Aaj Nahi Toh Kal Kharid Lo” – The 24-Hour Rule

Kids want to buy everything. Right. Now. Teach them Buffett’s trick: delay gratification. That means—wait before you buy. 90% of the time, they’ll forget what they wanted. Genius, right?

“Mummy, mujhe woh action figure chahiye!!”
“Theek hai, kal le lenge.”
Tomorrow arrives. Kid forgets. Wallet survives.

Financial discipline for kids is needed everyday as we all know we are slave of our habits.

4. 🛋️ Talk Money At The Dinner Table – Not Just Politics

Warren Buffett says financial literacy for kids starts at home. So next time you’re having daal-chawal, discuss the electricity bill or why EMI is not a friend. Make money talk normal, not awkward.

Trust us, your kid will thank you later when he’s not crying in front of a credit card bill at 28.

Financial literacy for kids is a topic we should internalize in our kids.

5. ❤️ “Give a Little, Gain a Lot” – Teach Them to Donate

Buffett is giving away 99% of his wealth. We’re not saying your kid should donate their whole piggy bank, but a little giving goes a long way.

Teach them to keep 3 jars: Spend. Save. Share.

Because being rich is cool. But being rich and kind? That’s next-level billionaire behavior.

Teaching kids about money and values is what should be our ethics. a day will come when your kid will be a big tree like Banyan and will give shed to others.

💡 CashBabu Gyaan: Raise Money-Wise Kids, Not Money-Blind Adults

Look, you don’t need to open a Demat account for your toddler (yet). But if you don’t teach them money lessons now, society, TikTok, and their broke cousin will.

So channel your inner Buffett, mix it with middle-class wisdom, and raise a kid who won’t call you at 30 asking, “Papa, FD mein paisa daal du ya Crypto mein?”

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10 Financial Lessons Middle-Class People Learn Too Late — Don’t Be One of Them

Dear Friends,

Have you realised ever only 10 Financial Lessons for Middle-Class People can be a game changer for their rest of life?

Today, I’d like to discuss ten crucial financial lessons that many individuals in the middle class often learn too late in life. Understanding these principles now can set you on a path to financial stability and success.

1. Emergency Funds Are Essential

Life is unpredictable. Having an emergency fund covering 3-6 months of essential expenses can prevent you from resorting to high-interest loans or depleting retirement savings during unforeseen events like medical emergencies or job loss. Start by setting aside a small portion of your income regularly until you reach this goal.

Life doesn’t warn you before it slaps you.

Ramesh, a 35-year-old marketing exec, lost his job during the COVID-19 lockdown. With zero savings, he fell into a debt trap through credit cards and loans. If he had just saved ₹5,000/month for emergencies, he would’ve had ₹3 lakhs in 5 years.

Lesson: Save 3-6 months of living expenses. It’s not optional—it’s survival.

​

2. Beware of Lifestyle Inflation

As your income increases, it’s tempting to enhance your lifestyle accordingly. However, this can impede wealth accumulation. Instead, aim to invest a portion of every raise or bonus, allowing your wealth to grow over time.​

Getting richer doesn’t mean spending richer.

When Priya got a 40% salary hike, she immediately moved into a luxury apartment and got an EMI-heavy SUV. Five years later? No investments, no savings—just stress.

Don’t Let Lifestyle Catch Up with Your Income.

Lesson: Control lifestyle inflation. Let your money grow, not your liabilities.

3. Start Retirement Planning Early

The power of compound interest means that the earlier you start saving for retirement, the more your money can grow. Delaying savings can significantly reduce your retirement funds. Even modest contributions in your 20s can lead to substantial savings by retirement age.

You can’t borrow time, and compounding needs it.

Start Retirement Planning in Your 20s, Not 40s

Amit started a ₹5,000 SIP at 25. Sunil started the same at 40. At 60, Amit had ₹1.9 crore. Sunil? Just ₹42 lakhs.

Lesson: The earlier you start, the less you need to save and the more you’ll have. That’s compounding magic.

​

4. Understand Homeownership Realities

While owning a home is often seen as a wise investment, it’s essential to consider all associated costs, including maintenance, property taxes, and insurance. In some cases, renting and investing the difference may be more financially advantageous.

Not all assets appreciate—or make sense.

Anjali bought a ₹70 lakh home with a long loan. After 10 years, she barely saw appreciation, and spent lakhs on maintenance. Suraj rented and invested the difference. His portfolio outgrew her home equity.

Lesson: Think before you buy. A house is a utility first, an investment second.

​

5. Avoid High-Interest Debt

Carrying balances on high-interest credit cards can quickly erode your wealth. Aim to pay off credit card balances monthly to avoid interest charges, and be cautious about accumulating debt that doesn’t contribute to asset building.​

They’re designed to make banks rich, not you.

Rahul kept swiping his credit card, paying just the minimum due. His ₹1 lakh balance grew to ₹2.5 lakhs in 3 years due to compounding interest—the wrong kind.

Lesson: If you can’t pay the full bill, don’t swipe. Use credit, don’t get used by it.
10-Financial-Lessons-for-Middle-Class-People1

6. Invest Beyond Just Saving

While saving is crucial, investing allows your money to grow. Explore diversified investment options like stocks, bonds, or mutual funds to build wealth over time. Educate yourself on investment strategies and consider seeking advice from financial professionals.​

Money sitting idle loses value.

Neha saved ₹10,000/month in her bank account. Kunal invested the same in index funds. After 10 years: Neha had ₹12 lakhs, Kunal had ₹23 lakhs.

Lesson: Don’t just save—invest. Let your money fight inflation and grow.

7. Diversify Income Streams

Relying solely on a single income source can be risky. Consider developing additional income streams, such as side businesses, freelance work, or investments, to enhance financial security and accelerate wealth building.

Your job is not your financial plan.

Varun has a full-time IT job, but also earns from wedding photography and a YouTube channel. When layoffs hit, he didn’t panic—his side income had his back.

Lesson: Build at least one backup income. Don’t depend on just one source.

​

8. Time Is a Valuable Asset

Recognize that your time has value. Investing time in learning new skills, networking, or creating passive income sources can yield significant financial returns in the long run.​

Time is your greatest compounding asset.

Shalini spent 2 hours daily binge-watching shows. Isha used the same time to learn digital marketing. Today, Isha earns ₹50,000/month as a freelancer. Same hours, different results.

Lesson: Time invested wisely pays lifelong dividends.

9. Prioritize Financial Education

Continuously educate yourself about personal finance, investment strategies, and economic trends. An informed approach to financial decisions can prevent costly mistakes and open up new opportunities for wealth accumulation.​

What you don’t know can cost you lakhs.

Manoj followed WhatsApp stock tips and lost ₹3 lakhs. Then he read The Intelligent Investor and learned real strategies. Now, his portfolio beats inflation and earns returns.

Lesson: Spend time learning about money. It will repay you for decades.

10. Plan for Taxes

Understanding tax implications and planning accordingly can save you significant amounts of money. Utilize tax-advantaged accounts and seek strategies to minimize tax liabilities legally.

You don’t have to pay more tax than necessary.

Saira and her colleague both earned ₹12 lakhs/year. But while Saira paid full taxes, her colleague used ELSS, NPS, HRA, and saved ₹1.5 lakhs annually—legally.

Lesson: Tax planning is not cheating—it’s smart living.

​

Final Words from Your Mentor

These lessons aren’t rocket science, but they do require discipline, awareness, and consistency. The middle class often stays stuck not because they don’t earn enough—but because they don’t learn enough about money soon enough.

But you? Now you know. Start applying, one habit at a time.

If you found this helpful, share it with your friends, cousins, or anyone who’s still ignoring their money story.

By internalizing and applying these lessons early, you can navigate your financial journey more effectively and avoid common pitfalls that hinder wealth accumulation. Remember, proactive and informed financial decisions today pave the way for a secure and prosperous future.

Best regards,

[Mithun Samanta]

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The ₹1.8 Lakh Gift That Turns into ₹2.1 Crore: Lump sum investment for child

Have you ever thought about your child’s retirement corpus? What can be the best lump sum investment for child’s future?

The ₹1.8 Lakh Gift That Turns into ₹2.1 Crore: A Retirement Jackpot for Your Child is the next big thing that can happen in your life.

Imagine gifting your child something that doesn’t depreciate, get outdated, or lose value over time. Instead of splurging on gadgets or extravagant celebrations for their 18th birthday, what if you gifted them financial security for life? Here is the description on Best lump sum investment for child’s future

₹1.8 lakh investment for retirement as best lump sum investment for child’s future

Let’s break it down:

  • You invest ₹1,80,000 in a high-performing equity mutual fund when your child turns 18.

  • Assuming a long-term CAGR of 14%, this one-time investment remains untouched until your child retires at 60.

  • The result? ₹2.1 crore! 💰💰

In this way we can make it the Best lump sum investment for child’s future

Why This Works: Power of compounding investment as Best investment for child’s future in India

Compounding is like planting a mango tree—water it early, let it grow, and by the time it matures, it bears fruit year after year.

In this case, the money earns returns on returns, growing exponentially over four decades.

Have you ever thought of Long-term investment for ₹2 crore corpus for your child’s future?

If you have ever thought then the next SIP vs. Lump Sum comparison will explain it in two different way.

Comparison: SIP vs. Lump Sum

  • If you invest this amount as a lump sum at 18, it rides the market waves and grows with time.

  • A monthly SIP alternative would need to be around ₹1,500 for 42 years to reach a similar amount!

In both the cases you can get the chance of Mutual fund compounding benefits!

Key Takeaways for Indian Job Holders

✔ One-Time Effort, Lifetime Reward – No monthly commitments, just park and forget.
✔ No Market Timing Stress – A long-term horizon smooths out volatility.
✔ A Gift That Keeps on Giving – By 60, your child can retire stress-free!

✅ What can be your next most valuable gift on your kid’s 18th birthday apart from the Best lump sum investment for child’s future in the form Mutual fund Investment.

This is how you come to know – How to turn ₹1.8 lakh into ₹2.1 crore for your kids.


✅ Retirement planning for child in India is in focus of the entire content. So if you are a parent, do not dare to apply the knowledge of this content.


In the meantime I have written a content on Mutual fund compounding benefits. If you would like to read that content now, you can from this link.

Power of compounding investment

In case of you, if you are thinking how long will I need to wait to take the compounding benefit, I will mention to read one content that I wrote about the story of one individual mutual fund patient investor. He was rewarded with his patience and discipline.

🔹 One-time mutual fund investment growth

Now its your tuen to take a bold decision whether you want to give your child the one time 1.8 lakh rupees as one time mutual fund investment or in SIP format.

🔹 Long-term investment for ₹2 crore corpus

That was back then 2009 and I just came to know the term “sensex” I did not know what long term means and what short term means. People surrounding me used to do trading. I was also fascinated to trading.

I took me 13 years to understand what is the big difference of mutual fund and direct stocks benefit. I faced so many times the issue of delisting of my holding stock from trading. I saw market fluctuations and my stock not to recover even if the index recovered completely.

Gradually I came to know about ETF. Gradually I came to know Mutual funds.

Well what long term and what short term if my 1 stock out of my 10 stocks is becoming the laggard and pulling down my entire portfolio. So, I decided to switch from  direct stock to mutual fund. I am now not in loss and towards achieving my goals as mutual fund long term investment is all about focusing and achieving your goals.

Final Thoughts on How to invest for child’s retirement

This is not just an investment; it’s a legacy. The question is—will you give your child just another birthday gift, or a ₹2.1 crore head start in life?

Your move. 🚀💡

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How to select the correct mutual fund for 2025? What should you consider when choosing a mutual fund?

Some things to keep in mind when investing in mutual funds: If you have no experience with mutual funds, it is better to invest in mutual funds with the advice of a qualified advisor

Now, we will see what things should be focused on before investing in funds.

  1. Benchmark VC fund performance
  2. Risk-o- meter
  3. Beta
  4. Alpha
  5. Rolling return
  6. Annualized return
  7. Profit Earning Ratio
  8. History of fund house
  9. Expense ratio
  10. Performance of fund manager

Now, we will briefly discuss these points.

Benchmark vs fund performance to analyse correct mutual fund for 2025:

 

What is the benchmark?

The benchmark is the standard index for fund performance; if fund performance is greater than the benchmark, the fund manager is doing the fund very well.

Some commonly benchmark Indexes:

Nifty 50

BSE SEN SEX

Nifty midcap 100

Nifty small cap 100

Nifty 500

Nifty next 50

Nifty Bank

 

Benchmarks have standard protocols and specific marks. If the fund outperforms the benchmark, it will get good returns.

 

Example:

If the benchmark return is 14% and the fund performance is 16%

👇

The fund is performing well.

If the benchmark return is 16% and the fund performance is 14%

👇

The fund is performing poorly.

 

Risk-o-meter

A mutual fund is a tool created by the securities and SEBI to help investors understand how risky different mutual funds are. It shows the level of risk for each fund.

 

👉 There are six different categories of risk:

1) low risk, low to moderate risk, moderate risk, moderate high risk, high risk, very high risk.

2) The risk-o-meter is a crucial tool for investors to assess the risk associated with a mutual fund and make informed investment decisions.

 

BETA

Market movement related to fund sensitivity. Beta measures how much a mutual fund’s return moves about the market.

For example, if a benchmark index, such as the Nifty50 or BSE Sensex, has a beta of 1, and if a mutual fund has a 1, the fund’s return moves in the same direction as the benchmark.

 

👉 Beta helps investors understand the risk associated with mutual funds.

👉 Higher beta indicates higher risk and potential for higher returns, while lower beta indicates lower risk and more stable returns.

 

How to calculate beta?

1) chose a market benchmark using a common market index like the S&P 500 to represent the overall market.

 

2) collect returns date get past returns for both the mutual fund and the market index over the same period (daily/weekly)

 

3) calculate the returns and figure out the percentage change in both the mutual fund and the market index.

 

4) calculate the covariance and variance to find Beta the following formula used.

 

covariance of the fund market

Beta: ____________________________

Variance of the  market

 

ALPHA

A positive alpha indicates that the fund outperformed its benchmark.

Example- an alpha value 2 indicates that the fund outperformed its benchmark by 2%.

Negative alpha: Negative alpha indicates that the fund underformed its benchmark.

For example, an alpha value of 1 indicates that the fund outperformed its benchmark by 1%

 

Rolling return

Rolling returns measure the average annual returns of a mutual fund over a specific period, calculated continuously over different intervals. This method provides a comprehensive view of a fund’s consistency and performance across market cycles. It is particularly useful for assessing volatility and long-term trends.

Instead of looking at one-time specific periods, rolling returns calculate coverage returns for overlapping periods; for example, to find 3-year rolling returns over 10 years, you would calculate the return for 6 3 years. Move forward by one month and calculate the next three 3 years’ return. Keep doing this until you have covered the whole 10 years.

 

👉 Example- let’s say mutual fund had these annual over 5year.

 

Year 1= 10%

Year 2= 12%

Year 3= 8%

Year 4= 15%

Year 5= 9%

 

👉 for the first 3year (year 1- 3year)/, the averag  return is

10%+12%+8%

______________  = 10%

3

 

👉 for the next 3 years (year 2 to year 4), the average return is

12%+8%+15%

_______________  =11.67%

3

👉 for the last year (years 3 to 5), the average return is

8%+15%+9%

_______________ =10.67%

3

Annualized return

Annualized return is a way to show how much a mutual fund grows each year on average over a certain period, including the effect of compounding. It helps in comparing different investments more easily, even if they are for different time lengths.

 

Example:

If you invested Rs.10,000 in a mutual fund and it grew to Rs.12,000 in one year, the annual return would be.

(Rs.12.000-Rs10,00).Rs-10.000*100=20%

Profit Earning ratio

The profit-earning ratio (P/E ratio) tells you how much investors are willing to pay for each dollar of profit a company or mutual fund makes. It helps investors decide if the fund or the stocks it holds are priced too high or too low compared to the profit they generate.

 

How to calculate the earning ratio

 

price of one unit (or share)

P/E ratio=  ___________________________

Profit made one unit.

 

History of fund house

The history of fund performance can be checked in the following ways.

 

👉 Check the return of the fund over various periods- 1 year,3 years,5 years, and since its start

👉 Compare the fund performance to its benchmark index. (like the Nifty50 or Sensex) to see if it outperformed or underperformed.

👉 Check the risk level of the fund and understand how the fund responded to market volatility.

👉 Check the performance of the fund during major economic events (example: 19 pandemic)

👉 Check the risk-adjusted returns of the fund, that is, the Sharpe ratio.

 

  • Sharpe ratio formula: Sharpe Ratio = (Investment Return – Risk-Free Rate) / Standard Deviation

 

 

Expense ratio

-According to the rules, the fund expense ratio that exists today will not remain the same after five years. As per SEBI rules, the expense ratio will continue to decrease as the size of the fund increases. Here, a maximum of 2.4% expense ratio is charged.

 

Performance fund manager

A mutual fund manager’s primary role is to manage a mutual fund’s portfolio, making investment decisions (buying and selling securities) to achieve the fund’s objectives and maximize returns for investors while managing risk. Moreover, you can visit the Money Control Pro website to know about the performance of the fund managers of all the fund houses.

 

Conclusion on how to select correct mutual fund for 2025

Keeping all these things in mind, it is better to invest in mutual funds. If we do not have any experience, it would be better to invest with the advice or help of a fund manager. In this case, we invest through an application App, and our family may not be informed about this investment. But if we invest with the advice of a fund manager, he will provide all the investment fund -related help to our family members in our absence.

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5 Money Lessons Parents Must Teach Their Kids – Inspired by Warren Buffett

Money management isn’t just for adults—it’s a life skill that kids should learn early. Money Lessons for Indian Parents is what we need to focus on in this specific piece of content with the example of Warren Buffet. Warren Buffett Money Lessons will help us in learning that for our kids. Warren Buffett, one of the world’s greatest investors, believes that financial habits form young. So, why not prepare your children to be smart with money? Here’s how parents can instill timeless financial wisdom in their kids:

Money Lessons for Indian Parents

1. Start Early – Make Money Lessons a Habit

Buffett says, “The earlier you start, the better.” In India, children grow up watching parents handle finances, but rarely get hands-on experience. Instead of just handing out pocket money, involve them in real-life money talks—like how you budget for monthly groceries or how you save for big festivals like Diwali.

Pro Tip: Give them a small weekly allowance and teach them to split it into three jars—spending, saving, and investing.

2. Savings Over Show-Offs

Indian culture often encourages big celebrations and lavish spending, but Buffett’s philosophy is clear: saving should come first. Teach kids that money saved today grows for tomorrow. Show them the power of compounding with a simple example—if they save ₹10 every day, by the end of the year, they’ll have ₹3,650!

Pro Tip: Open a minor bank account and let them deposit money themselves. Watching their savings grow will excite them.

3. Wants vs. Needs – The Most Crucial Lesson

Do they really need the latest iPhone, or is their current phone good enough? Help kids differentiate between necessities and luxuries. Buffett advises people to spend wisely, and this habit should start young.

Pro Tip: Before making any purchase, encourage them to ask: Is this a need or a want? This simple question can prevent impulsive spending.

4. Invest in Yourself – The Best Asset You Own

Buffett believes that the greatest investment one can make is in personal growth. For Indian kids, this means focusing on education, acquiring new skills, and constantly learning. Instead of just aiming for marks in exams, encourage them to develop real-world skills—public speaking, coding, or even entrepreneurship.

Pro Tip: Encourage kids to take up internships, freelancing, or small projects to earn and learn simultaneously.

5. Think Like an Entrepreneur – Learn to Earn

Whether it’s selling homemade sweets during Diwali or tutoring younger students, encourage your kids to think of creative ways to earn. Buffett himself started his first business as a child—selling chewing gum and Coca-Cola bottles!

Pro Tip: If your child has a hobby (painting, crafting, gaming), help them turn it into a small business. This will teach them budgeting, marketing, and patience.

Money Lessons for Indian Parents2

Final Thoughts

Financial wisdom isn’t taught in schools, but parents can fill that gap. By applying these simple lessons inspired by Warren Buffett, Indian parents can raise financially smart, independent children who understand the value of money and success.

Want your child to be money-wise? Start today!

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Today, we will discuss how a person invests in mutual funds, but if he dies in the future, how will the nominee withdraw his money?

  1. First, if you invest some money, you have to make a nomination. As per SEBI rules, it is important to add a nominee to any Demat account, like we do with banks and post offices.
  2. Keep your family members informed about your investments.
  3. If you have opened a Demat account through a broker or app, note down all the information, including the ID and password, in a diary and keep telling members about it.
  4. If the investment person dies for any reason, and you are the nominee, you will first have to obtain a death certificate from a government-owned office.
  5. You are a nominee, you will need to submit a few documents for identification.
  6. You will need to provide your bank account details, in which case you can submit a canceled check.
  7. You will need to collect a claim form to withdraw money from the broker through whom you are investing.
  8. Claim forms need to be collected to withdraw money from the broker through which the invested person is investing.
  9. The nominee will have to collect the requesting transmission from the company in which the invested person invests in the mutual fund.

Conclusion

These five necessary documents must be submitted to the asset management company from where you invested in mutual funds, MC company. After this process, they will verify, and they will give you the option to continue this scheme and withdraw money. If you want to withdraw money, it will take 30 days.

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