The Mutual Funds Investment Thread

[Vyom]

Aiming for FIRE is good! But like you said, no point of having a corpus that we can't enjoy in future. So looks like you have a balanced approach in mind.

But thinking that "MF as a saving account that just had a lot more interest rate" could backfire easily.

See, market can be irrational for a long time. So suppose you want to withdraw money in year 2025. But another pandemic hits the roof and suddenly market crashes. We know it will recover, but how soon that we don't know. So it's important to have goals clearly defined (most probably printed or hand written somewhere). So if you had a goal to withdraw in 2024, you could have avoided the crash. If your goal coincided with a crash, then it's just bad luck, but chances for that is less if you plan to pull out for your goal and always follow the plan.

 

[rockfella]

Aiming for FIRE is good! But like you said, no point of having a corpus that we can't enjoy in future. So looks like you have a balanced approach in mind.

But thinking that "MF as a saving account that just had a lot more interest rate" could backfire easily.

See, market can be irrational for a long time. So suppose you want to withdraw money in year 2025. But another pandemic hits the roof and suddenly market crashes. We know it will recover, but how soon that we don't know. So it's important to have goals clearly defined (most probably printed or hand written somewhere). So if you had a goal to withdraw in 2024, you could have avoided the crash. If your goal coincided with a crash, then it's just bad luck, but chances for that is less if you plan to pull out for your goal and always follow the plan.

Got your pint. The last thing I will do is withdraw when it crashes.

 

[sling-shot]

If everyone can make money from MFs, who is losing it?

 

[Vyom]

If everyone can make money from MFs, who is losing it?

Nobody. In fact, long term "investing" is not a zero sum game. You invest in the company by investing and taking a stake in the company. When the company grow, value of the investment also appreciates.
It's trading, that's a zero sum game. When one gains, other loose.

 

[Zangetsu]

How much money is enough for Retirement ?

 

[Nerevarine]

What do I do with the stocks I have with my current company ? I am leaving the company and the brokerage account they opened in my name is valid for 1 year. I want to move it to a different brokerage account (which hopefully wont charge yearly fees). Can anyone assist ? Or should I just sell it now and redeem it ? Company is HP Inc, and its at all time peak atm.

 

[icebags]

How much money is enough for Retirement ?

you need to achieve financial independence . then, after that you should still be able to commit to savings for a safe lengthy retired life.

 

[icebags]

i have another query though. what are you people opinion on index funds ( sensex/nifty ). it seems i need to make one sip there too, for relatively less monitoring and diversification purposes.

 

[rockfella]

How much money is enough for Retirement ?

Depends on your requirements. More the better lol.

Example:
1 Crore invested ROI 12% and you withdrawing 50k every month and withdrawal amount increasing 10% every year for 30 year. 12% ROI won't cut it.

 

[rockfella]

Everything changes when we assume ROI as 15%!

 

[Vyom]

What do I do with the stocks I have with my current company ? I am leaving the company and the brokerage account they opened in my name is valid for 1 year. I want to move it to a different brokerage account (which hopefully wont charge yearly fees). Can anyone assist ? Or should I just sell it now and redeem it ? Company is HP Inc, and its at all time peak atm.

Depends on if you need money "now". And if you trust hp to grow more in coming years. If you think HP will grow, transfer the shares to another demat account.
If you think company is at it's peak, then sell and invest in some shares you believe in. Decision needs to be taken in respect of your trust on company and your need of capital.

 

[Vyom]

i have another query though. what are you people opinion on index funds ( sensex/nifty ). it seems i need to make one sip there too, for relatively less monitoring and diversification purposes.

Index funds are becoming popular recently. Since it have very low (or no) maintenance charge and exit load, you can open an SIP there.

 

[Nerevarine]

I want to keep and forget it for 20 years but I need an external brokerage account. My current one, merrill lynch will get closed 1 year after my resignation.
Anyone know how to get started on this ?

 

[Vyom]

Oh I realized you are talking about US only stock and US only broker. No idea about it mate.
Better call the customer care and ask them directly how to transfer shares to your own demat account. But you can't transfer to India based demat account.

 

[rockfella]

Here is why one should start asap even with a small amount:

 

[TheSloth]

I had a small discussion with a friend and he asked me few questions which I could not answer so I am asking you guys for help.
Say after 20 yrs one is closing the investment and the closing amount is 1Cr INR.
1. How much tax one has to pay(as per today) on this amount and how much will be the final amount?
2. Can we do anything to reduce the tax on this closing amount?
3. If the tax is huge, is it wise to do long term investment and end up paying huge tax. Considering the inflation in economy as well, will the final amount in hand will be good enough to consider investing for such long periods?

 

[rockfella]

*www.livemint.com/mutual-fund/mf-ne...nces-launch-of-fang-funds-11617783904851.html

 

[whitestar_999]

I had a small discussion with a friend and he asked me few questions which I could not answer so I am asking you guys for help.
Say after 20 yrs one is closing the investment and the closing amount is 1Cr INR.
1. How much tax one has to pay(as per today) on this amount and how much will be the final amount?
2. Can we do anything to reduce the tax on this closing amount?
3. If the tax is huge, is it wise to do long term investment and end up paying huge tax. Considering the inflation in economy as well, will the final amount in hand will be good enough to consider investing for such long periods?

10% is the current tax rate beyond 1 lakh in long term(sum invested/sip older than 1 year) capital gains from MF which is still good enough considering absolute return after all those years will be likely in the range of 500-600%.

 

[TheSloth]

10% is the current tax rate beyond 1 lakh in long term(sum invested/sip older than 1 year) capital gains from MF which is still good enough considering absolute return after all those years will be likely in the range of 500-600%.

you mean even if the total amount is around 1Cr, the tax will be 1L? I thought it will be around 35%

 

[whitestar_999]

you mean even if the total amount is around 1Cr, the tax will be 1L? I thought it will be around 35%

That 35% is for 30 lakh+ tax slab income in a year not investment income accrued over the years. You report long term capital gains in a separate section in ITR & system will apply the 10%(or whatever the rate at that time+some cess etc) on this amount different from your income taxed as per tax slab.

*cleartax.in/s/schedule-112a-scrip-wise-reporting-capital-gains-listed-equity-shares-units