The next thing to do is to hire a manager to manage your investment. How on earth, you ask?
A professional manager would charge an exorbitant fee. Yes, you are right. But with this strategy, you get to choose a professional manager from the many who are already providing their expert services in the financial marketplace.
Did you get a whiff of what I am coming to?
Perhaps yes. You might have heard about mutual funds. Mutual funds collect money from thousands of “entrepreneurs” like you and me and they have a professional fund manager who manages the money for everyone.
The only difference is they don’t call us – “entrepreneur”, they call us “investor”. But the moment you see yourself as an entrepreneur rather than just an investor, there will be a sea change in your approach.
Think about Warren Buffet, or closer home, Rakesh Jhunjhunwala. They are entrepreneurs of a different kind. They research a business and buy a stake in it.
Can we imitate them? Not many can do that because it needs domain expertise and hours of research. But there is a way to do what they are doing without imitating them totally. And that is through mutual funds.
You just need to select the one mutual fund scheme you want to go with. SEBI, the financial regulator in India has capped the mutual fund expenses to 2.5%. So will be shelling out a maximum of 2.5% of your investment as fund management charges.
So if you invest ₹5000 you are paying your fund manager just ₹125.