How to Invest In Mutual Fund That Pay You a Monthly Salary After Retirement?

Invest in mutual fund that pay you a monthly salary after retirement
Today SIP tomorrow SWP in mutual fund:
An excellent way to plan for retirement. Now a day Mutual Funds have become a better option for financial planning or Investment. In Mutual Funds the risk is very low compared to the stock market and there is a guarantee of returns in the long term. If you invest in a mutual fund with an understanding while on the job, then it can help you after retirement. Investing small amount each month can give you financial freedom in later years of your life.
For this, Today SIP(Systematic Investment Plan) and Tomorrow SWP (Systematic Withdrawal Plan). You can arrange salary each month after retirement of ₹. 65k for yourself every month for the next 20 years.
Let’s Take An Example..
If you make a monthly SIP of ₹. 10k every month for 20 year with 12% annual return, it will becomes ₹. 1cr
Now calculate return on ₹. 1cr @ 8% annually, it will be ₹. 8 lacs. So you will get 800000/12 = ₹. 65k monthly like a salary by investing your money in many low risk Investment as SWP (Systematic withdraw plan).

What Is Systematic Withdrawal Plan.

A systematic withdrawal plan (SWP) is a plan which allows you to withdraw a fixed amount(units) from your mutual fund at regular periodic intervals(monthly, quarterly, half-yearly or annually) as per your requirement. With every withdrawal, the value of your investment in the fund is reduced by the market value of the units you have withdrawn as the withdrawal happens at current NAV (Net Asset Value).

It has been observed that SWP is a more reliable option than divide
Hence In SWP, you have complete control so It is a more reliable option than dividend. You take regular income from SWP by redeeming units from the scheme. At the same time, if you have surplus money after the fixed time, it will also be paid to you.

Also Read.

What is Systematic Investment Plan?

Systematic Investment Plan For Salaried Person Explained in a Simple Manner.

Liquid funds can be better option than FDs and savings accounts.

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Savings accounts are not for investment, it is only ensures that your money is liquid means easily available whenever you required with a very low interest or no interest in many cases. Most of the people doing same with their excess fund available, saving in savings accounts and can not beat the inflation. You can ask yourself whether it is best for your money or not. If not then “Is there a better way to deal with excess cash?” in your mind.
Liquid funds can be an option for an even better utilization of your surplus funds or parking your emergency fund as the best alternative to saving account.

Your hard-earned money parked at any savings bank account earns a very low rate of interest. Savings account in different banks in India offers interest rates varying from 2%-4%. On average, most banks offer 2%-3% and the same would be used throughout the article for comparison. There are some banks which offer a high-interest rate of up to 6%. But these banks usually have a high minimum balance that you have to maintain.

What are Liquid Funds?

Liquid Funds are debt mutual funds that invest in very short-term market instruments with low-risk with a maturity of up to 91 days.. The returns given by them are slightly higher than savings bank account. Liquid funds help you to earn a higher rate of interest as compared to savings bank investment with liquidity (better than FDs), that too with considerably low risk. If talking about liquidity then liquid Mutual Funds are better than FDs because of their no lock in period.

Benefits of liquid funds.

1.  No lock-in period:

Liquid funds do not any lock-in period.

2.  Easy redemption(very liquid):

Redeeming liquid funds is very easy and the money will be credited in 1-2 days in the individual’s bank account. While other mutual funds can take anywhere between 3-4 working days to invest and redeem money, liquid funds take around 1-2 working days.

3.  Better returns than a savings account and FD:

You can expect a return of 5%-6% from liquid funds per annum which is better than savings bank interest and return from FDs. Also, the returns post inflation from liquid funds is higher than from a savings account and FD.

4.  No minimum balance:

In savings bank account you have to maintain a minimum balance to get interest. But with liquid funds, there is no limit on minimum or maximum investment.

5.  Variety of plans:

There are plenty of plans available for different time periods like daily, weekly, monthly, dividend and growth plans in liquid funds. You can choose any plan based on your financial goals.

It is very clear from these benefits that investing in liquid funds is very beneficial than leaving the money idle in a savings bank account and fixed deposits.

Govt Announced New Social Media Guidelines To Prevent Its Misuse

Govt announces new social media guidelines to prevent its misuse.
The Ministry of Electronics and Information Technology (MeITY) has announced its draft Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, for social media platforms, OTT players & digital media on Thursday to prevent the misuse of social media that make it mandatory for platforms to give out the originator of certain messages containing unlawful information, while also requiring social media platforms such as Facebook, YouTube and Twitter to remove such content within 36 hours of being notified and social media platforms will also be required to provide information, including related to verification of identity, to lawfully authorized agencies within 72 hours.

At a press conference, Union Minister Ravi Shankar Prasad said, “Social media is welcome to do business in India, they have done exceedingly well, they have empowered ordinary Indians. The government welcomes criticism and right to dissent….It is important that social media users running into crores should be provided a platform for raising their grievance to raise complaints about misuse of social media.”

The rules, a draft of which were released in 2018, comes close on the heels of a tussle between the government and Twitter over removal of certain content related to the ongoing farmers’ protests. The government has also disagree with WhatsApp for over two years on the issue of tracing the originator of the messages.
According to the rules released on Thursday intermediaries providing services primarily in the nature of messaging would “enable the identification of the first originator of the information on its computer resource” as may be required by an court order or an order passed under Section 69 of the IT Act by the Competent Authority.

“such order shall not be passed in cases where less intrusive means are effective in identifying the originator,” it said, adding that the order would only be passed for the purposes of prevention, detection, investigation, prosecution or punishment of an offence related to the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, or public order, or of incitement to an offence relating in relation with rape, sexually explicit material or child sexual abuse material punishable with imprisonment for a term of not less than five years.

Union Minister Mr Prasad said, “ in complying with an order for identification of the first originator, no significant social media intermediary shall be required to disclose the contents of any electronic message, any other information related to the first originator, or any information related to its other users”.
It is mandatory to reveal details of the first originator of a mischievous post by the social media intermediaries. “They have to tell us, who started the mischief,” he stated.
The intermediaries should remove or disable access to content “which is prima facie in the nature of non-consensual transmission of any material which exposes the private area of any person, shows such person in full or partial nudity or shows or depicts such person in any sexual act or conduct, or is in the nature of impersonation in an electronic form, including artificially morphed images, and such content is transmitted with the intent to harass, intimidate, threaten or abuse an individual,” within 24 hours from the receipt of a complaint made by an individual or any person on their behalf.


What Is Systematic Transfer Plan In Mutual Fund

What Is An Systematic Transfer Plan?
An STP(Systematic Transfer Plan) is a plan that allows you to give consent to a mutual fund to periodically transfer a certain amount / switch (redeem) certain units from one scheme and invest in another scheme of the same mutual fund house. Thus at regular intervals an amount/number of units you choose is transferred from one mutual fund scheme to another of your choice.
By using STP (Systematic Transfer Plan) you can invest your money as lump sum amount in debt funds (liquid/ultra-short funds), and transfer a predefined amount into another scheme, typically an equity fund. The scheme in which the lump sum investment is made is called ‘source scheme’ or ‘transferor scheme’ and the scheme to which the amount is transferred is called ‘destination scheme’ or ‘target scheme’ or ‘transferee scheme’. Generally investors put lump sums into a liquid/ ultra short-term fund and transfer it to an equity/ balanced/sectoral /thematic fund.

1. Consistent Returns.
Through STP, you can transfer your money to a target equity fund while you are invested in a debt or liquid fund. So, you will get the returns of the equity fund you are transferring into and at the same time you will get risk free returns from your debt funds which is generally higher than that of a savings bank account.
2. Rupee Cost Averaging.
Hence, a fixed amount of money is invested in the target fund at regular intervals, STP assists in averaging out the cost of investors by purchasing more units at a lower NAV and vice versa same like an SIP.
3. Rebalancing Portfolio.
STP facilitates in rebalancing the portfolio by allotting investments from debt to equity or vice versa. Many investors use this method to rebalance their portfolios. If investment in debt increases, money can be reallocated to equity funds through systematic transfer plans. If investment in equity goes up, money can be switched from equity to debt funds, using STP.

How Does Systematic Transfer Plan Works?
You have to select a fund from which the transfer should take place and a fund to which the transfer is taking place. Transfers can be made daily, weekly, monthly or quarterly(like an SIP) depending upon the STP chosen and the options available with your AMC.
If you choose to transfer from a liquid fund to an equity fund, then your lump sum is invested in a liquid or a floating short-term plan and is transferred at regular intervals(as your pre defined) to a specified equity fund. For example, if you have 100,000 to invest in equities; you can put the entire amount in a liquid plan and go for a monthly SIP of 10,000 in an equity plan through an STP.

STPs can carry Exit Loads as per the respective mutual fund of the AMC.
If you invest offline using forms of fund houses, you will have to transfer from the debt fund to the equity fund of the same fund house. However, if you use an online portal, many offer the flexibility to transfer from a debt scheme of one fund house to an equity scheme of another fund house.

Types of Systematic Transfer Plan.
A Systematic Transfer Plan is of three types; Fixed STP, Capital Appreciation STP and Flexi STP.

1. Fixed STP

In Fixed STP, you take out a fixed sum of money from one investment to another.

2. Capital Appreciation STP.

In Capital Appreciation STP, you take the profit part out of one investment and invests in the other.

3. Flexi STP.

In Flexi STP, you have a choice to transfer a variable amount. The fixed amount will be the minimum amount and the variable amount depends upon the volatility in the market.

Thus, STP is particularly suitable to investors who have lump sum money and wish to invest in equity funds but are wary of timing the market. They can then choose to invest the money in a liquid or debt fund as lump -sum and use the STP option to systematically transfer at fixed amount of money at regular intervals into the target equity fund.

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