On Mutual Fund

Last Friday I went to a fund management company to make my first investment in a mutual fund. It’s really not that big, it’s actually the minimum investment for that type of fund.

I was itching to have my money invested in it ever since I got hold of the books of Francisco Colayco and Bo Sanchez on finances.

I want to have a retirement fund as early as now and create a passive form of earning money.

Putting money in the bank for my personal savings only gives less than one percent of interest per year and it depends on the amount of money I deposited with them.

In a mutual fund company, there is no definite amount of return in my investment. It really depends on what type of fund I put it into and how risky am I as an investor. If you want to invest here you have to make sure that it’s the money you’ll be able to part with for a period of time.

Mutual fund companies pools the money of different individuals and invest it in government securities like T-bills and T bonds or they invest it in the stocks market.

Investing directly in government securities and in the stock market entails a lot of money and it is very complicated to understand the stock market.

Mutual fund companies have fund managers that do the transactions in behalf of all the investors that put money into their fund management.

You just need an initial investment of five thousand pesos to open an account with them.

It’s really just like saving in the bank but this time with a much higher return for your money.

For example you are to invest ten thousand pesos and do not make an additional investment anymore and let say that in twenty four years your money earns an average of twelve percent per year; this is how much your ten thousand pesos have grown.




After six years 20,000
After twelve years 40,000
After eighteen years 80,000
After twenty four years 160,000

Imagine, if you can invest a hundred thousand and again with no additional investment; this is how much it would have grown if it earns an average of twelve percent per year for twenty four years.

After six years 200,000
After twelve years 400,000
After eighteen years 800,000
After twenty four years 1,600,000

If you are to continuously make an additional investment the return would definitely much better then the projection I have illustrated. These computations were base on the rule 72 found in the book of Francisco Colayco.

To learn more about mutual funds, and about other topics on becoming financially independent you may check the following:

Websites to check:

www.colaycofoundation.com
www.icap.com.ph
www.pinoymoneytalk.com

Books to read:

Eight secrets of the Truly Rich - Bo Sanchez
Pera Mo Palaguin Mo book 2 - Francisco Colayco
Rich Dad, Poor Dad – Robert Kiyosaki ( not sure of the spelling)

And if you have more queries regarding this matter, feel free to leave your question and your e-mail address to my cbox or just leave a comment to this post. I might just have the answer for you.