Why should mutual funds?

Why should mutual funds?

We need to know and I have discussed in previous chapters. However, there is 1 best reason I can say that mutual funds do not require large investment funds, starting from IDR 100,000 - IDR 1,000,000. In general, we can directly buy mutual fund products. .

This is different from investing in property, where buying property requires more funds because you have to pay a down payment of at least 30% of the transaction value, making property not easily accessible to everyone.

Making a business investment such as starting to buy a franchise is also an attractive investment, but it requires attention that can take our concentration away, and in general the investment value in starting a business also requires much larger funds.

Many people feel that because their funds or money are limited, they are lazy to invest or save. However, this view or way of thinking is completely wrong. In fact, people who have limited income or income really need to invest or save in a disciplined manner. Let's just imagine, for someone who has a very well-established income level, sending their children to school doesn't require too much planning.

No matter where you go to school, whatever tuition fees, whatever school donations, it's not a big problem. However, it is different from someone who has a limited income, without planning where his child will go to school, how much is the base fee, and so on can make the dream of making his child go to school in a good place to disappear. Therefore we need a way to plan the funds they have with more discipline through saving or investing.

Apart from the point of view of lack of funds, sometimes many people feel that the investment value is too small so that it looks meaningless and finally discourages from starting to save and invest. For example, if we make periodic investments in mutual funds of IDR 100,000 every month, the nominal is meaningless because it is too small to be enjoyed in the future. Is that so? To answer this I try to make an illustration, I am a young man aged 25 years who has just worked, every month I want to set aside money from my work salary of IDR 100,000. Right now I'm going to open a stock mutual fund savings account at Commonwealth Bank. I chose 1 stock mutual fund product which for the last 3 years has increased NAV by an average of 18%/year and I deposited an initial fund of IDR 100,000. Then every month the money that was set aside IDR 100,000 I bought the mutual fund product and at the end of the year because I got the holiday allowance I added to buy the share mutual fund for IDR 500,000.

If I do that for 10 years then I will get the amount of money? From the illustration above, it seems that we invest very little money in mutual funds. The details are as follows:

My current age is                         : 25 years old

The length of time I invested     : 10 Years

Average % of mutual funds        : 18%

First time deposit                        : IDR 1,000,000

Investment every month           : IDR 100.000

Additional investment/year      : IDR 500,000

At the age of 35 years from the illustration, I was able to withdraw the equity mutual fund with a yield of IDR 560,735,868. Wow ... not a big money when we invest every year, but the income from what is invested becomes quite large in only 10 years. Although it is true that the return value of mutual funds cannot be determined with certainty, in the following chapters it will be explained in more detail that planning and purchasing mutual funds in a slightly more tactical manner can generate returns from mutual fund investment results in general. Therefore, if at this time you are still confused with the terms in mutual funds and the basic understanding of mutual funds, I suggest that you repeat these 3 chapters so that you become more aware and want to understand how big and how attractive it is that we can invest and save in mutual funds. mutual funds.