Money Matters

I answered the question on Quora . There are many factors, some of them I can list down based on personal experience. Indians invest majority of income on house and gold and that leaves them little to invest in other avenues. Financial education has not yet caught up to educated people of our country. There are many  among us who are unaware of the fact that  Long Term Capital Gains from equity mutual funds are tax free. There are many misconceptions regarding equity investments, for example trading in shares and investing in shares is considered as same thing . I would also partly blame the Investment agents (Banks, LIC, Insurance), often giving wrong advice to customers. Insurance is mixed with investments which are separate things. Everyone wants to get rich quickly so the time horizon for investment is very less. Over a short period of time Mutual Funds or Equities deliver unpredictable returns, but people often overlook the power of compounding over large period...

I answered this question on Quora I have received many great advises thanks to one of blogs  Subramoney  and have benefited immensely from same. Some of them which I can remember are as follows. You only need 2–3 funds from good fund houses without need to constantly check their performance. Fund manager is more important than the Mutual Fund itself for delivering consistent returns. Fund Management cost has big impact on your overall returns, even a difference of 0.5 percent of FMC charges can shave off lakhs of rupees from your final returns due to inherent nature of compounding. Starting early is key to financial freedom. Don’t sell your fund just because it has few bad years, the fund manager might be having a contrarian view and he may be doing something different. For example HDFC Top 200 had some bad years, but it has now become one of the best funds again. Investing very less amount in Mutual Funds SIP compared to your income, is not going to make you wealth...