passive income

 Hello investors,

Investment is like looking at sapling that grows over time to become a fruit bearing tree , compounding is like getting fruits each year for free , An investment in Equity mutual funds are like investing in a basket of diversified businesses that generates and creates wealth over many generations ,  a business man invests in business to grow and create wealth for him and society , An investor invests in the the promising business opportunity to generate wealth , you invest your money from active income source to generate a life long passive income source that leads to financial freedom and happiness , here mutual funds are seen not less than a business where you invest that leads to financial freedom , a systematic investment plan in mutual fund can create huge wealth over long term horizon , assume a person who starts his first job at age of  25 and started investing a 10000 INR every month in a diversified equity mutual fund scheme through SIP route , today let say he is 45 years of age and that SIP investment generates CAGR of 15% on YoY basis then he has invested for 240 months , an amount equal to 2400000 INR , the current value of investment of Rs. 2400000 is now more than 13200000 INR  today , suppose he is having monthly household expenses at 75000 INR , If he wants to retire today , he can start withdrawing money from the same mutual fund scheme in which he invested regularly with discipline , let say the mutual funds are growing at the same rate of 15% then he decides to withdraw 75000 per month from funds to bank account to fund his monthly expenses then the rate of withdrawal would be  7% per annum , the remaining investment corpus would grow at the rate of 8% over many years , let us suppose he withdraws for 40 years until he dies at the age of 85 over and above the national life expectancy of 72-73 years , means 480 months that equals to 480*75000=3.6 crores INR , the remaining fund for next generation transfer would be unimaginably high , can you guess the remining fund value ??? that would be 1807298520/- that is 180 crores of rupees , The above scenario is just to explaining power of mutual funds and compounding .

Disclaimer- mutual funds investment are subject to market risk - please consult before getting into any MF investments 

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