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astha swamy
by on May 15, 2021
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Do you wish to invest in mutual funds? You are certainly on the right track since mutual funds in India represent the right avenue for earning added income in the near future. In these tough times when the coronavirus pandemic is raging throughout India and the world itself, a few strategic mutual funds investment plans will help you stay on course towards deriving some added income that will come in handy for tackling future goals greatly.

There are several ways and means for earning income via the mutual fund market although you need to play your cards right. Here’s taking a look at the ways that investors earn additional income from any good mutual fund.

1. Income from bond interest gains and stock dividends- Income from financial mutual funds or other funds is earned via dividends on the shares/stocks and also including interest on bonds in the portfolio of the funds. The mutual fund will naturally spend a large portion of the income it garners in a year on paying out dividends through a distribution to owners of fund units. Investors can receive dividends periodically or choose to reinvest the same for purchasing more shares in the bargain. This is a key part of mutual fund returns that you should know more about.

2. Capital gains from selling securities- If the mutual fund is selling securities that have witnessed a price increase, then there will be a marked capital profit. The fund will pass the same onto its investors.

3. Increasing value of fund scheme- If holdings increase in price but the fund manager does not sell the same, then price of shares in the fund will go up accordingly. Investors may sell the same for a profit.

You can thus start investing in mutual funds for earning some additional income. It is all the more necessary in these tough times. You can make money from capital gains, dividends and interest and also from any hike in the value of the mutual fund scheme itself. You can also choose MIPs or monthly income plans which come under these funds for getting steady income every month through interest and dividend cash flows. You can accumulate sizable wealth for the future through your mutual fund investments. For building wealth and securing your financial future, you should deploy long-term investments which give you around 10-12% or even higher in terms of overall returns.

Make sure that you also diversify and put some of your money into fixed income generating instruments which are safer and do not have as much risks associated with them. You should do your homework and start investments in mutual funds for generating steady income in the future, particularly when the future looks uncertain due to the impact of the ongoing coronavirus pandemic. Earning some extra income is always welcome for any household in these times. Make sure that you take proper financial advice and guidance before investing.

 

Posted in: Finance
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