Do not buy Mutual Funds if you want to get rich. Only buy DIRECT MUTUAL FUNDS if you wish to get wealthy. The former will make your brokers rich, at your expense.
How? Each year 1%-1.5% commissions add up, compound and over 20 years you ‘lose out’ roughly 30%-40% of your TOTAL investment!
Who are the brokers? One who collects commission from the Mutual Fund company (i.e. producer). This money goes out of the you, the customer’s pocket. FundsIndia, ICICI Direct, Scripbox, ET Money, Fisdom all sell “Regular Plans” which take such commissions.
The best way to buy Direct Mutual Funds, is to go for an unbiased platform that takes 0% commissions. One where funds and advice is given by SEBI Registered Investment Advisors (highly regulated, no bias).
There are other options too (detailed out in Where can I buy mutual fund direct plans online in India?):
- MF websites: Selection among 1000s of funds/schemes is tough. You will need manage multiple login/accounts
- Utility platforms like MFU, CAMS: Same problem of selection. No advisory. No followup.
Of the online direct mutual fund platforms, go for one which is:
- 100% paperless – no signing of documents, couriering etc.
- eKYC with Aaadhar – onboarding new investors is digital too
- Super Convenient to use with Mobile App, Web App
- SIPs etc are easy to setup and unlimited
- Large selection of top Mutual Fund companies. Preferably 20+
- Safe with your money. One who doesn’t even touch your money!
Note: Many large brokers ‘pool’ money and then send it to the MF. - Helps with the tax filing reports at the end of the financial year.
- Growing by word of mouth and user experience.
Note: Many brokers make enough profits (at your cost) to spend aggressively on ads.
Jama [https://jamawealth.com] is an online direct mutual fund platform that meets all of the above. Give it a shot. Jama solves the broken processes of the industry and brings more of your money back to your pocket!
