Financial Fix: Creating A Second Source Of Income

(MENAFN- Kashmir Observer)
Representational Photo

By Irshad Mushtaq

Investing in mutual funds can help secure your financial future through compounding and diversification opportunities. Start small, seek professional advice, and watch your wealth grow steadily.

Creating a second source of income through investments is crucial for securing our financial future. Savings and investments properly managed through compounding can lead to substantial wealth accumulation over time. Mutual funds offer a low-cost investment option with diversification opportunities. Start small, seek professional advice, and watch your wealth grow steadily.

As we all know, we have daily expenses in our lives such as food for the family, clothing, and so on. At the same time, liabilities like children's education, home build, or car purchases create additional financial obligations or any other liability . For those running a business, or working on salary, having a backup income from investments is crucial for securing their future finances. This is why investing is of utmost importance.

Investments play a significant role in our daily lives because they can help us save and fulfill future financial goals, such as children's education. It is essential to understand that savings and investments that are properly managed through compounding can lead to substantial wealth accumulation over time. While real estate may yield good returns, it is important to note that the true power lies in compounding, which typically averages at 18-20% annually over 20-40 years in Kashmir. When thinking about investments for the next 10-20 years, the stock market emerges as a suitable option for consistent returns.

However, navigating the stock market requires a significant level of knowledge. Starting with small savings and seeking professional advice can help individuals build wealth steadily over time. Mutual funds offer a low-cost investment option, with minimal advisory fees and no GST charges for customers. This provides clients with flexibility and diversification opportunities.

Therefore, investing in mutual funds as a secondary source of income in a professional way, properly diversified with quality funds, and choosing proper investments through SIP is very important. Remember that mutual funds may offer lower returns, but it is crucial to understand that a 15% to 20% compounding annual return is a strong return. Even the biggest business
may not earn 20% annual compound interest, so achieving compounding returns in a short period like a month or six months may be challenging due to market volatility.

So, saving and investing through SIP in mutual funds at an early age is crucial for building wealth over time. Even with average returns of 15-22%, it can still outperform other asset classes like insurance, gold, fixed deposits, or real estate. Start small and watch your money grow! Consult a trusted financial advisor so that returns will match with your expectations.

• Learn from the insights of writer, investor, entrepreneur, founder of M I Securities and Business Partner at Sharekhan Srinagar J&K. Reach out at [email protected] for valuable knowledge, financial advice, on financial matters

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