Road to successful investor

Those who are interested to invest and build a personal financial plan for life have a goal in mind. Be a successful investor. Especially, if you know about legend investors, your mind will tempt to follow the methods and the road they selected to there success. That is a good idea but, there are some factors and homework an investor must do himself to be a successful investor in life. This article pointing out some must required actions. Read the entire article below:

Read, read, read

Consider to read maximum. Reading great books, articles and newsletters will give you enough knowledge to select the right path at tight time. Not only that but, it will also give you enough knowledge on various aspects on investment instrument selections and valuations. A successful investor should spend enough time to find and read most useful books and articles to gain all required knowledge.

Acquire knowledge on available products to invest

Investment world is not small with one or two products. It is very vast and the success of an investor laying on the selection and combination of these products at the right time. To have a successful financial plan, an investor should aware about the advantages and disadvantages of all the investment products around him. He should be able to identify the right one and compare the same with all other similar products available in the market to identify the winner or the loser. A successful investor not only should have good knowledge about the products he deals with presently but, he should be able to understand and explain the features of various products available around him.

Watch business channels

Television especially business channels are necessary part to investors day to day life. This is a very good source to get updated information on latest trends and changes. I am not saying to believe and act as per what they are saying but, through business channels, an investor will get enough opportunity to identify best investment products to do own research to understand the investment suitability. Make this as a regular practice.

Usage of internet

Internet is the excellent source to get instant access to well written articles, valuable informations, real time data and other similar informations. Utilize the maximum and get enough knowledge about all the areas of investment practices.

Grouping and social networking sites

Social networking sites are a best source to share and take ideas. It is very helpful to identify whether your plan has any loopholes or chance of failure. You can also receive very good reviews on your ideas as well as winning ideas from experts who are also in the part of the group where you are in.


Don't believe everything blindly

A careful approach to the research reports and the words from self acting investment gurus required your own research and study to believe or avoid. Always have practical approach. Don’t believe anything without your own research. Research reports might have hidden traps to investors if blindly follow them. Through study and digging to the truth will help you to identify the fact and act as per that.

Chat with experts

Chat rooms are an excellent source to get real time informations from experience people. Care should be taken about the person in the other end and don’t blindly believe him without your own study on what they are suggesting or recommending.

Participate to events

Participating events related to the subject is a good idea to get helpful informations and knowledge. In my opinion, an investor should take the advantage from all the events happening around him. It can be an investor meets or an awareness section or a company general meeting. Whatever it is, participating to such events help an investor to meet people with similar thoughts as well as chance to contact experts. It is also helpful to clear any doubts and get prompt answer to your questions. It can also be used for building good friendships with other investors.

Passion on investing

This is the most important factor. Be passionate. Without passion, you can’t achieve anything. Learn from the real life of legend investors. They have enough passion to the profession and that lead them to great success. So be passionate or leave such profession immediately.

I am happy to know whether this article useful to you or not. If you feel that I have missed some important points, please comment and inform me. I will add the same as soon as possible because that will be a great help to those who are reading this post in the future.

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What is reverse mortgage

Well. The word ‘mortgage’ is very familiar in the financial world. Generally, it is directly connected to loans or any other form of money lending. But, the term ‘reverse mortgage’ is little confusing and new with most of the developing countries. For your knowledge, the term ‘Reverse Mortgage’ is very familiar with developed countries and recently introduced to most of the developing countries. Those who really like to know more about this term can read this article to get a good awareness.

In an ordinary mortgage loan, the person who is borrowing the loan from a lending institution or bank should provide an assurance to the company that, he will repay the loan within the agreed time. To cement his assurance, the borrower pledging his property or his home to the institution against the money he borrowed from them. If a borrower fails to repay the loan the stipulated time, bank has authority to sell his home or property to recover the loan amount and its interest.

In “reverse mortgage” a person who has own home but no regular income, can pledge his home to the bank to receive loan. This amount can be received as lump sum at the beginning or as equal monthly, quarterly and half yearly or even yearly installments depends on how he wants to receive the loan amount. Here, the borrower has right to live in his home till the end of his life and doesn’t have any responsibility to repay the loan that he accepted on his home.

Generally, a person who plans for a reverse mortgage should complete an age of 60 years. Such loan has duration of maximum 15 years. However, the lending institution can decide the duration if required. The loan amount shall be equal to the 60% value of his home. Lending institution or bank has the right to decide interest rate for such loan. Interest can be calculated as fixed or floating but, bank has to inform the details to the borrower and he should agree the same before proceeding to further.

Borrower can use the loan amount as he wish. But, the amount should not be used for such activity like gambling etc. He can use the same to the maintenance of home, treatments or to bear living expenses etc..

How a bank can recover the amount what they given as reverse mortgage loan?

With reverse mortgage, a person can pledge his home for getting loan and he can stay in the same home till the end of his life. If a person dies or leaving the home permanently on before the loan duration, bank has full right to recover the loan amount and interest by selling his pledged home.

Prior to such action, bank is liable to provide enough time to the borrower or his family members to repay the loan amount with interest. If they are repaying the amount in full with interest, bank should give the home back to them immediately, without further claim or proceedings.

If they fail to repay the loan within stipulated time, bank has right to sell the home to recover there given loan and interest amount. But, if any excess amount from the selling, i.e. if bank had received a selling price that is more than the loan and calculated interest, bank is liable to hand over such excess amount to the borrower or his relatives.

This is all about the reverse mortgage term that you should aware. I would like to drag your attention on some disadvantages and points to consider:

1. Reverse mortgage is good for those who are aged couples and no one there to take care of.

2. It is only best for those who are aged more than 60 years.

3. While applying for reverse mortgage, if you are and old couple, you are required to as the possibility to be the joint applicants.

4. Interest rates in reverse mortgage are commonly high. You should ask and get all the details from the lending organization on this regard, prior to move further.

5. Risk weightage of the loan can be decided by the banking regulatory board and that is controlling the rate of interest. Risk weightage is different in countries and that may result difference in interest rates too.

6. Before applying loan under reverse mortgage, a study and comparison on the interest rates of various organizations and the other factors will give better chance to select the loan from a best organization. You should be well aware about any kind of hidden costs that may be applicable.

7. In most cases, the duration for such loan is maximum 15 years. If a borrower survives the duration, he can still live with his home but will not any money from bank for further. A loan with maximum duration is the only solution to recover such situations.

8. A pledge property will be reevaluated once after 5 years. At the time, there could be difference in the value of the property. A borrower has full right to decide whether he needs to continue with loan or terminate the same under new conditions after the revaluation. If he is not willing to accept new conditions, the lending organization has right to stop further payments. In such situation, the borrower liable to the amount what he accepted as loan till the date and also liable to repay the amount with its interest to the lending organization.

Hope you have understood well about the mentioned term ‘Reverse Mortgage”. You can inform me once if you feel that I have missed any important points or you have any points that required me to add with this article to help others.

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Money lessons to kid

An early action to teach your kid about money and savings are a good idea to give better money management ideas when they grow. Using simple methods depends on there age, you can easily bring them getting good understanding on money and can grow a habit of savings. Below are some practical methods a parent can use to teach there kid about money and savings. Have a look:

Age group 1 to 7 – Give her a piggy bank and let her collect and deposit coins to that box. Regularly give coins to your kid for her piggy bank. This approach build a habit of small savings in the early ages.

When the piggy bank is full, open a savings bank account in parents name and deposit the amount to that account. Small drops can form a sea in the future.

Someone in my place starts this habit at the age of 2 and still he following at his present age of 43. The account his father opens for him still alive with enormous amount from his small deposits for long term and now he planned to teach this habit to his daughter and present this account to her.

Age group 7 to 10 – Give her awareness about savings bank account, how adding and removing money from savings accounts, how the money growing in it with interests etc… teaching her about interest calculations will do magic at this stage.

Take her to bank with you and let her learn how dealings are happening there. Give ideas to know more about bank transactions.

Age group 10 to 15 – Start a recurring deposit. Instruct to add a small fixed amount in each month. She can easily collect this amount from her pocket money and gifts. You can also give small amounts as gifts on there good work like well study, helping mother and father, cleaning house, gardening etc. Let her build very good awareness about systematic savings well as the hardworking nature to get awarded promptly.

Teach her on compound interest and the magic of compounding. It is very good in this age to know how compound interest works and how the amount increasing by its power.

Give practical knowledge on banking services like using ATM, cheque book, internet banking facilities etc.

Age group 15 to 18 – Give directions to get knowledge on various investment instruments available in the market. Teach her about mutual funds and how it is working, fixed deposits etc. Let her get awareness about various investment products and the difference of returns from these products and different risk levels related to each products. Teach her the possible systematic and disciplined investment methods available with various instruments.

Starting mutual fund investments using SIP (Systematic Investment Plan) will be very helpful to teach disciplined investment style in this age.

From the age of 18 – Give well awareness about stocks and how stock market working, mutual funds and how mutual funds working, profit and loss possibilities with each of these instruments, risks related to such investments. It is important to teach the pros and cons of investment instruments that is directly related to stock market.

Let them start stock investing using there own D-mat account, which you can help to open in there own name. Give them idea about the preparations required to start stock investments by providing investment practices used by legend investors. You can present them the very best available biographies and books on the work of legend investors, to get her very good ideas on successful investing.

Help to start her personal financial plan by providing the idea behind it and convincing its requirement for her life. Help her to plan and build her own financial plan by identifying various possible investment instruments by assessing risk taking capacity teach them the methods of selecting good investment instruments for long term.

If you plan properly from the beginning, I can assure that your kid will be a master financial planner at the age of 30. By doing such, you are not only leading her life through proper and bright channel but also, inspiring her to pour this knowledge to her kids.

Parents should take necessary precautions when teaching there kids about money and savings. Parents should identify and correct any over enthusiasm which may happen to there kids on money. If allow, this can lead them to be a money greed character. This should be avoided using proper guidance and timely corrections.

My best wishes to those already started teaching savings and investments to their kids and also best wishes to those who planned to start the same.

If you have any articles or ideas on kids and money, please forward that me to add in this blog to get useful to others.

Commenting on this article will be considered as an appreciation.

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Invest in future top models

Imagine having invested in the likes of Kate Moss or Gisele Bundchen at the start of their career! And then getting a share of their earnings! You would be laughing on your way to the bank!

Now everyone has a chance to discover the future cover girl or catwalk start on www.beautyholding.com by investing in her beauty and talent!

“Hobby of a rich girl”

It may go against conventional stereotypes, but the fact remains that not every beautiful girl can effectively kick-start her career as a professional model without being supported financially and promoted in a way that enables her to earn a decent living off her dream career. Not every natural beauty is from a rich family and can afford to come and try her luck in one of the fashion capitals of the world – be it Paris, Milan, New York or London – which are, coincidentally, among the most expensive cities in the world!

Despite all the eventual glamour and flash associated with the career of a successful model - the usual focus of the media - it is easily forgotten that the path towards that success would require a significant (financial) investment by the model herself, her relatives and the modeling agency, and that so many would fail and so few would succeed on the way there for the simple reason that no sufficient financial backing was available to kick-start the modeling career in an efficient and professional manner. This is because all well-paid assignments do not come straight away!

With these considerations in mind, Beauty Holding was created to place any beautiful girl in the World on an equal footing with the more privileged ones, in order to try to help her succeed in her dream career. Now you do not only have a chance of making a sound investment but also be helping an aspiring model.

Sponsorship = Investment

On the BeautyHolding.com website, a Model can enter the so-called Golden Beauty Race by uploading her pictures and waiting for her Sponsors to start investing in her. Every user has a personal profile page, so the website has a feel of a social network.

When the Model raises USD 10,000 from her Sponsor contributions, she will be whisked away to London and Paris to be introduced to modeling agencies and have her professional portfolio produced by top fashion photographers. The sponsorship fund will be used to cover flights, accommodation, photo-shoots and other expenses required for the Model’s effective promotion.

Return on investment

The Model will share with all her Sponsors a half (50%) of the net earnings generated by her during the first year of her professional modeling career. To break it even for the Sponsors, the Model in question will have to net at least $20,000 during that year. This is far from impossible as an actively working professional model makes at least $50,000-$100,000 a year, while a very successful one can generate $250,000 and more. In addition to a real chance of making money, her Sponsors will receive signed photos and other gifts.

Benefit to all

According to Ingrid Devatova, a former model and director of her own modeling agency who joined this young start-up (its website was launched to the general public in June 2008), Beauty Holding was intended to use the power of Internet as a source of new communication and investment culture. She says: “I wanted to contribute to the building of a new generation of social network, which brings not only entertainment but also real value to our users – both Models and Sponsors.”

"This is an article added upon request from third party and the owner of this blog doesn't have any responsibility on any of your action upon this article"

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Investing in real estate

Real estate is a magic word in the investment world. Intelligent investors are adding real estate to there portfolio in a proper proportion to get handsome returns in a long run. Why real estate is so popular? And how a retail investor can have real estate investment exposure to his portfolio with an affordable amount or comparatively very less amount? These are the two major questions in front of us when dealing with real estate.

There is no doubt that real estate is booming around the world. Fund houses already focused to real estate with real estate specific funds and some eminent fund houses already started international real estate funds for there customers to have real estate as well as international diversification exposure. The word real estate not only means the physical form of investments but also mean the other possible forms. Example, investment in real estate companies are another kind of investment.

Why real estate investments are booming and becoming popular? Answer is already there in the previous paragraph. It is booming and the requirements are growing day by day. The major intention of intelligent investors focus to real estate investment is not only the earlier benefit but also the ability of real estate investments that can use a fantastic shield against rising inflation. It is a known truth that the growth in an economy naturally grab the inflation also up. Debt instruments are big losers in the inflation focused investment because of the inability to produce returns that match to the inflation rate. Real estate investments are the clear winner in this with the ability of producing inflation adjusted returns at any time. This is a major benefit.

How can an ordinary investor get exposure with real estate investments? Naturally this is the major doubt coming to us when reading about the real estate investment opportunities. Retail investors doesn’t have the required amount to invest in the real estate like big investors in this field. Is there any option form them? Yes there are. Small investors with limited capital can take a way of real estate funds as well as buying equities of very good real estate companies.

Real estate funds: Compare with other available funds, real estate funds operations are slightly different. In US, REIT’s (Real Estate Investment Trust) are formed as companies to invest in different kind of real estate or real estate related assets, including shopping centers, office buildings, hotels, and mortgages secured by real estate. You can read more details HERE.

In United Kingdom this activity done through “Pooled Managed Vehicles” or PMV’s. In India, Stock Exchange Bureau of India (SEBI) issued guidelines for fund companies to start real estate funds. Below are some key points to remember when dealing with Real Estate funds:

1. Real estate fund scheme will be worked as a closed ended scheme for 3 years. They can open fresh issues in each quarter and the NAV (Net Asset Value) is based on the time.

2. Redemption or repurchases shall happen in the staged manner at the end of 3rd year. This can be 30% of redemption/repurchase after 3rd years, 40% can be at the end of 4th years and so on.

3. This scheme should listed to stock exchange to provide the liquidity to the investors (point 2 influencing to this action)

4. NAV (Net Asset Value) for the scheme will calculate on quarterly basis as per the valuation

5. This scheme shall operate within the regulations of Mutual funds and subjects to amendments.

6. Tax benefit to such scheme are par with other mutual funds.

7. Scheme can invest in Equity shares/bonds/ debentures of the listed companies which deal with properties and property developments. Scheme can invest is Mortgage-backed securities. These scheme can undertake or finance the properties like ready building to lease and the income from lease will consider as regular income and can distributed in investors in the form of dividends.

8. Real estate scheme can involve financing to direct estate projects, construction, purchase and option to purchase of buildings under construction with a view to sell it again. They can also invest to the debt securities issuing by construction and development companies

9. Real estate schemes can be started by mutual fund companies / Asset Management Companies under approval from SEBI and also should have the Offer Document as per existing regulations for mutual funds.

10. Under the restrictions, any investment in one corporate limited up to 10% of the corpus and investments on any properties owned and managed by sponsor limited to 25% of the corpus. Also, initial launch expense limited to 6% same as existing mutual fund regulations. There are investment restrictions based on a project, a promoter group and a geographical area to mitigate the concentration of risk of the investment portfolio.

11. There are registered valuers in the purpose of valuating properties held by real estate investment schemes.

Above are the must have information for investors to invest in a forth coming real estate funds. Real estate are booming and same time the fraud activities also booming. Always remember to deal with approved companies and trusts to safe your investments.

Hope you enjoyed this article and it is able to provide all the must required information to you to enter to the future investment instrument.

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When I stop my smoking…..

In my life, there is only and only one promise I always failed to keep. Only one decision I always failed to execute successfully. Only one loop hole I had in my financial basket. My habit of “smoking”. Yes I was a heavy smoker and didn’t stop that habit till I saw a night dream. Did I stopped smoking after I woke up from the dream? No. But, that dream influenced me a lot say good bye to smoking. Not only I got health, but, I fixed the major black hole in my financial basket that costs me money in daily basis for a long term. Read about my dream and how that influenced me to add value to life and financial planning basket.

I have written an article earlier in my blog titled “Convert a bad habit to millions”. It was showing the power of little drops at the end and intending to open the eye of one who has a bad habit that costs money. The interesting part in that, I also have influenced with that article and stopped my smoking habit for a period. As usual to any smoker, I also started the same again but, till I saw the below dream.

The dream was: Somebody carrying a coffin to the cemetery and I saw I was inside the coffin. I didn’t felt any pain on that. Because, everyone in this world going to die by today or tomorrow. I cannot see any one following the coffin except two. They are my young and lovely wife and dearest little daughter. She is in the age of one and half years and just starts walking. Her mother was holding her right hand and she was walking with her but little behind because she was not able to walk like her mother. Both were following the coffin. I didn’t felt any pain because it is natural.

Then, I realized that my little angel was not only walking slowly but, was crying loudly looking on the face of her mother, who was looking on her face too and was weeping. She don’t know why her mother was weeping but she realized that something bad happened to her life. Yes, my little angel lost her father in that dream and she is now a kid who doesn’t have father with her and any more in her life. I heard a small voice saying that, he died because of smoking.

I woke up from the horrible dream and became very nervous. The face of my crying kid gave me lots of heart pain to think about the reason why I saw such dream. I take a decision to stop my smoking habit. But after some time, I went out to my home with the memory of the dream and painful little face of my kid in my mind. This dream influenced me a lot. Even though, I didn’t stop smoking but, when I was smoking, the face of my little kid and the picture of a coffin start hunting me continuously. I tried a lot to forget this dream but, the picture starts to come more forcibly and more clearly and it starts giving enormous pain.

I was not able to avoid the picture when I was smoking each cigarette and later it starts when I was going to buy the cigarette. I was not able to survive a situation where my kid is weeping because of the lose of her father. I reduced the number and sometime throw the cigarettes that were in my hand and going to smoke. Very soon, I became allergic with the habit and that went from me forever.

Now, I am a free bird because, smoking was the only habit I had in my life and failed whenever I thought stop. It is not now with me. I am free from the horrible dream and I want my little angel to not have pain because of my habit. This situation gave me an opportunity to calculate the amount that I was spending each month for cigarettes. I didn’t invests the same as usually what I was doing but, I was keeping that amount till the end of each month for my kid to put into her small and lovely piggy bank, that I presented her at the time of her first birthday and teach her how to put money on that. Now she is able to put money herself without any help from anybody.

My surprise, the amount in the end of each month was more than what I was spending for my half months expenses for food. Of course it will be a very huge amount more that my one month earnings, at the end of the year. Now I have only one feeling because I didn’t start this savings about 10 years back.

If you feel more about your kid and family, try to avoid the path leading you to see the weeping face of your dearest one and little angels. Let anything go from you for ever if that help you to see the happiest face of those who loves you lot in your life. Best wishes.

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Investment portfolio requirements

Building a good portfolio is the dream of each investor. There are lots of instructions and methods about how to build a portfolio, will be available in the internet. Practically, most of them are not doing any help to an ordinary investor or retail investor. The base of portfolio is the selection of proper investments in proper time and with correct numbers. Below you can read the major considerations required when you planning for a portfolio.

Generally, a portfolio is a mix of investment instruments that provide handsome returns to an investor in his focused time. It should achieve the goal of an investor within the period of time he expected to have the portfolio. Portfolio selection required lots of study. Investment Goal, Period of holding, investment instruments, number of instruments, balancing and diversification. These are the must considerable points when planning to build a portfolio.

An interesting thing is, all the above mentioned factors are inter-linked when you build a portfolio. None of them are avoidable when building an investment portfolio.

Investment Goal is the major factor for an investor to start his investment portfolio. Without a solid goal, that can change your life or once only can achieve in the life, any decision to make any investment will not have serious approach and useless. A common error in this section is, some people have goal of multiplying there money within a limited time. This is not a goal. In stead, this is known as greed. Most of the young and less knowledgeable people falling to this wrong way and finally will lose money because of no plan, no goal in there life to start an investment properly.

In my experience, the best definition for a goal is: "A well decided target in one’s life that required disciplined financial action and patience to get result from this action”. A goal can be anything. Buying a pack of cigarette also can be defined as a goal. But that can’t consider as a life goal. In other meaning, that is not a life goal but it is a temporary goal. Just go to the shop and buy one pack. No one do investment for such goals. Very funny. Life time goal mean, building a house, education of children, a dream holiday etc. This goal required prior plan as well as action to achieve the same within certain amount of time.

Period of holding or Time: Once the investor decided his goal, certainly he should consider the time required to achieve that goal. This is an important point to consider because; building a portfolio by adding different investment instruments where the returns from these investments are entirely depends on time. Such way, time has a major role in investment.

For example, equity investment required a holding period of 8 to 15 years. If your goal is very short and need to be achieved by next 4 years and your portfolio for this goal have only equity investments, that required next 8 to 15 years to get returns, how the goal will be achieved?

From this example, deciding the time to achieve the goal will help you to identify the proper investment products to your portfolio that can give you profits at the time you required.

Investment instruments: As I said above, deciding investment instruments depends on your goal and the time you required to achieve the goal. Your age has influence on selecting an investment instrument. A person near to his pension is not at all recommended to go for equity investment as major into his portfolio. Instead, he has to go for secure investments. Like this, age also a factor when deciding an investment product. A well mix of equity and debt instruments should be considered depends on your age. The formula of subtracting your age from hundred is helpful here. An example, your age is 30 and subtracting the same from 100 will result 70. In your case, you should consider 70% of your investments in equity and equity related instruments and rest 30% to the debt or products the providing capital production. That is a good idea.

Number of instruments: Number has major role in the portfolio in the sense of investment instruments. You could be able to manage your portfolio and monitor the same time to time to avoid laggards and add profit makers. Holding endless number of products can give you pain instead of enjoyment. Less is beautiful in this case. Here, you have to learn from the investor legends like Warren Buffett or Merryll Lynch; a well mix of manageable securities will be helpful to ease your job by managing there easily. To avoid this problem, select one or two leaders from each industry as well as from large cap, small cap, mid cap space. This will give you the benefit of shield from large volatility, sinking of any industry as well as possible inclusion of future profit makers to your portfolio. Avoid any industries that booming very fast. In the previous experiences shows that, fast booming sectors will certainly follow a fast down. A right mix of maximum 24 stocks recommended.

Balancing act: As I said in previous paragraph, selection of an investment is entirely depends on your age. A person near to pension should have debt exposure instead of major equity exposure. Right mix of equity and debt required building a good portfolio and this required timely monitoring to avoid any laggards and add profit makers. Also, reduce or increase exposure to debt or equity depends on your age and risk profile.

Diversification: I have already mentioned the same in the “Number of instruments section. Selection should be focused on different section and different caps. There are possibilities of rising inflation and portfolio should consider the same too. Investment in gold in various forms such as Exchange Traded Funds, mutual funds, bars and coins, ornaments, real estate investment in the form of mutual funds or whatever available to play safely will do better to shield your portfolio from inflation. You can also diversify your portfolio by including international funds especially funds from emerging countries to get international exposure as well as a method to protect your portfolio from local volatility and slow growth.

Patience and the discipline are two must required qualities for an investor. I have clearly written an article in my document regarding this and you can read the same here. Wise action in the proper time using self research and study is a must quality for an investor and that will help to build a core portfolio till a great extend…

So be a wise investor as well as a good commenter to this article…

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Mutual funds vs Fixed deposits

Today, I am adding a very interesting article. I am sure, this will be very helpful to lots of people because, this is a clear cut comparison between mutual funds and fixed deposits. This article revealing the advantage and disadvantage of both investment instruments as well as cross comparing major benefits.

Fixed Deposits are the favorite for low risk profile people but who are unaware about the MF product that can also provide similar capital guarantee as well as more returns compare with FD's. Most newbie investors are interested to mutual funds especially I am getting lots of queries when the stock market going through the bear face and the prices of all stocks coming down. A comparison of both will give an exact idea about both instruments to these guys.

1. FD is a pure debt instrument with enough guarantee to the capital.This is a suitable investment instruments for those who have very risk profile and always worrying about any kind of lose of there money. Where, mutual funds providing option to an investor to select funds depends on there risk taking capacity. Money market, debt and liquid funds are good for low risk profile investors to park there money and sleep well and equity, diversified and balanced fund options are there for investors who is ready to take risk as well as get good returns compare with the previous options.

2. Mutual fund returns to an investor is upon his fund selection and performance of that funds. A good diversified Mutual funds are able to deliver 8% to100% returns to investor in the place an FD can provide maximum 10 to 12% returns to the customer. Debt mutual funds are better than FD returns because they can go till 15% if the fund is a good one.

3. Return from the mutual fund investment calculating in the compounded basis but, FD returns are in flat rate.

4. Mutual fund investments are very good to beat inflation because of its large potential returns in the future. FD's are clear loser against inflation because of its fixed return.

5. Equity MF is highly recommended for those in the age group of 20-40 but FD recommended for those who are near to pension age because he required guaranteed money after pension.

6. FD providing Tax benefit if it is for more than 3 years term Where ELSS MF only providing tax benefit with 3 years lock period.

In generally, mutual fund investments required little risk taking capacity compare with FD's. Even though, there are funds in mutual funds that is designed for low risk profit investors. Debt, liquid and Fixed maturity Term plans are secure funds and providing capital protection. Where FD is fully secured and no need to worry about the return after the term.

Mutual fund can be invested using SIP (systematic investment plan) which will make an investor very disciplined and allow him to reasonable protection from volatility and stock market fluctuations. This means, the mutual fund directly associated to stock market. Where, FD's with recognized financial institutions backed by Govt and not at all connected to stock market so the return will be fixed and sure.

Liquidity part is same for both mutual fund and fixed deposits.

Now you decide which is your better option as per your age, goal and risk taking capacity. Hope you will take a right choice.

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