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Savings of Rs 2000 per month changed my life

There are more than 1 lac SIPs running in Mutual Fund schemes now, amounting to around 3500 crores per month. There are many untold stories, which can motivate you to save through SIP ! One such story is being told here by Aditya Bhardwaz, age 44 years, Lucknow

Savings of Rs 2000 per month changed my life

Wednesday October 05, 2016,

4 min Read

It was exactly the 3rd October 1996 , around 20 years back , when a MF executive from Kothari Pioneer Mutual Fund , convinced with full sales power, to invest in Mutual Funds ! During that time, no one was even ready to listen about Mutual funds, and above all UTI was badly in news for all its wrong things ! Out of my small salary of Rs 6000 per month I could hardly think about saving anything big at that time. So this executive explained me some imaginary mathematics based upon ' compounding' ! He smartly explained me the concept of accumulating units of a particular Mutual Fund scheme, and how it will become a big wealth on the concept of 'Snow Ball theory' ?? 

By all his dedicated follow up , few of us opened a recurring account named SIP in Kothari Pioneer Prima Plus in 1996 Oct , for Rs 2000 per month. Most of my collegues had better understanding about financial market, and hence they kept regular track on this investment. In 1998 , our principal investment of Rs 82000 had become Rs 2,91,000, and the wise guys redeemed all the units smartly to book the profit ! Due to my transfer and change in job location, I could not actually get time to redeem the same ! In 2001 when I got time to review my portfolio, I was shocked to see that it was actually lower than what I had invested , and was really feeling bad of myself ! I still remember how much I shouted on that MF guy, for this volatile and such a risky investments advice. My whole planning of taking a CAR and setting up my home went into vain ! In 2008 when my actual investment reached up to Rs 2,70,000 and the scheme name was also changed to Franklin templeton Prima Plus, the market value of my accumulated units soared upto Rs 30 lacs ! That was a big greed to resist ! Whole family pushed me and all the advisors motivated me to sell this scheme - some told me to book profit and some suggested me to withdraw half the units. And then I heard that this same guy has started his own financial advisory firm at Lucknow, and got to see him for discussion. 

After saying a open heart sorry to him, I requested him to advice him on the action to be taken in this scenario - where 2.7 lacs has become 30 lacs. This guy told me one simple thing : " What will you do with this money ? Have you any current liability or any big expenses coming your way ? " He even explained me about the re-investment Risk and how it actually hampers all the wealth chart of an investor !! As per his advice I kept the units intact and continued with this SIP.

Today after exact 20 years , on 3rd of October 2016, my SIP contribution of 4.78 lacs have become whopping Rs 75 lacs in value ! I would like to thank to this advisor friend whose advice not only helped me reach here , but it tought me lot many lessons of life ! The most important lesson was the 'Power of compounding' . Second lesson , that such compounding can be best achieved in Mutual Funds , where NAV is published daily. And the third lesson is very very important - Fear and Greed are the only enemy of wealth creation !!

When I see people investing directly into funds, without the help of any professional and established advisors, I feel petty for them, like my old friends, who could never create wealth in their life due to thier own self realised smartness. May be I won because of my luck, but mainly due to the counselling and handholding by my advisor friend at the time of fear and greed !

Do share my story with all your friends and relatives who are looking to create wealth through SIP in Mutual Funds. Do refer them www.infirupee.com (m/s Infinity Finserv PVT Ltd) for nice fund suggestions and goal based investment planning. You can reach them at 9307218766 at Lucknow or can visit online from anywhere in India.

SIP chart for Franklin Templeton Prima  Plus Fund- 1996 to 2016

SIP chart for Franklin Templeton Prima  Plus Fund- 1996 to 2016