It is as plausible as filling the lake with teaspoons of water! Mutual funds do provide good returns on investment in comparison to others.

Introduction 

A mutual fund is one of the means of stock trading where investors invest their money by trusting professionals who do the trading on their behalf. These professionals mainly aim not to lose the investor’s money and secondarily, to maximize the return on investment.

As mentioned above, it is plausible to fill the lake with teaspoons of water, but that would require a lot of patience! And this is exactly what is required in terms of mutual funds. Long-term investment in mutual funds can give almost 22 to 30% returns on investment with the lowest risk factor. But there is another concept in mutual funds which with enough patience, can make you rich, and that is:

Power of compounding interest – Compounding interest is where the primary investment with interest is reinvested further, and the cycle goes on until you get the desired amount of return. For example, you invest 1,00,000 rupees where you get 10,000 rupees as interest, it totals to 1,10,000 rupees which you further reinvest in the same structure, making it 1,10,000 rupees as investment and return on the same will be 1,21,000 rupees and the cycle goes on, reinvesting for 15 years will further give you the return of Rs 4,17,725 on the initial investment value of Rs 1,00,000.

Conclusion

Thus, you can say that mutual funds make you rich, but it requires consistency, patience, and proper investment. As these funds are diversified in nature, it mitigates the risk of loss, and with proper allocation of the fund, mutual funds are an excellent choice of investment. 

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