Friday, February 20 2026
Source/Contribution by : NJ Publications

India is more financially aware today than ever before. Mutual funds are part of everyday conversations, digital platforms have simplified investing, and information is just a click away. Yet, when it comes to actually putting money to work, most Indians still hesitate.

The SEBI Investor Survey 2025 highlights a sobering reality. While 63% of Indian households are aware of securities market products such as mutual funds and equities, less than 10% actively invest in them. The message is clear: awareness alone does not translate into action. What investors truly need is clarity, confidence, and the right guidance.

Why Do So Many Investors Still Stay Away?

The answer lies in our deep-rooted preference for safety. Nearly 8 out of 10 Indian households prioritise capital preservation over growth. As a result, traditional instruments like fixed deposits, insurance, and gold continue to dominate household savings.

While safety offers comfort, completely avoiding market-linked investments comes at a cost-missed opportunities for long-term wealth building.

What’s more surprising is that this mindset cuts across generations. Even Gen Z, often seen as digitally savvy and progressive, displays a similar conservative approach. This suggests that risk aversion is not just a personal choice, but a cultural habit, passed down through families and reinforced by conventional financial wisdom.

Why This Mindset Needs to Change-Now

Protecting capital is sensible. But overprotecting it can be dangerous, especially in an inflation-driven economy.

The Inflation Reality:
If inflation historically averages 6% and you assume your fixed deposit earns 7%, your real return is barely 1% before tax. After tax, it may turn negative-meaning your money is quietly losing purchasing power.

The Rising Cost of Life:

• Education costs are rising at an alarming rate, far ahead of fixed-income returns.

• Healthcare expenses in India are projected to rise at 13% in 2025, higher than the global average of 10% as per Aon’s Global Medical Trend Rates Report 2025. The increase in healthcare cost is driven by rising hospitalisation rates and the growing adoption of advanced medical treatments. 

In such an environment, relying solely on “safe” instruments may keep your money intact-but your future needs are at risk.

The Real Impact on Wealth Building

The difference between playing it safe and taking calculated risk becomes dramatic over time.

Consider a scenario where an investor invested ₹10,000 per month consistently over a 25-year period:

*Assuming investment in Equity Fund and an average return of 12.62% p.a. as per AMFI Best Practices Guidelines Circular No.135/BP/109-A/2024-25 dated September 10, 2024. “Past performance may or may not be sustained in future and is not a guarantee of any future returns”. FD - Returns are Assumed

That’s a difference of over ₹1 crore-the reward for disciplined exposure to equities. This gap often defines the difference between a comfortable retirement and a financially constrained one.

How to Build Equity Exposure-Without Losing Sleep?

You don’t need to jump in headfirst. Smart investing is about gradual, planned exposure.

• Start small with SIPs: Begin with ₹1,000–2,000 per month to experience market movements without stress.

• Follow the 80–20 approach: Start with 80% debt and 20% equity, and gradually increase equity as confidence grows.

• Align investments with Needs: Use equity for needs which are 7–10 years away; stick to debt for short-term needs.

• Consider hybrid funds: Balanced Advantage or Aggressive Hybrid funds automatically manage equity-debt allocation.

• Secure your base: Maintain an emergency fund covering 6–12 months of expenses before increasing equity exposure.

Start with MFD: DIY Can Hurt 

The SEBI survey highlights lack of knowledge as one of the biggest barriers to investing. Yet, many first-time investors rely solely on YouTube videos or social media tips, leading to common mistakes-chasing hot sectors, timing the market, or panic-selling during volatility.

Seek guidance from Mutual Fund Distributors for:

• Need identification

• Assessing individual risk profiles

• Maintaining discipline during market ups and downs

• Rebalancing MF portfolios and managing taxes

• Aligning investments with your needs

Always verify credentials-look for a valid ARN for distributors. 

The Way Forward

The survey reveals an encouraging insight: 22% of non-investors plan to start investing within the next year. If you are among the 80% focused solely on capital preservation, it’s worth asking:

Are you preserving your capital-or preserving your limitations?

True financial security in today’s world isn’t about avoiding risk altogether. It’s about managing risk intelligently to beat inflation and achieve your long-term needs.

The real question isn’t whether you can afford to invest in equities. It’s whether you can afford not to.

Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully before investing. Past performance may or may not be sustained in future and is not a guarantee of any future returns.

Friday, January 16 2026
Source/Contribution by : NJ Publications

We spend our entire lives working for money. We save, we sacrifice, and we watch our SIPs (Systematic Investment Plans) grow. But there comes a point for every successful investor where the script should flip: It’s time for your money to start working for you.

While most people focus on the "accumulation" phase of investing, the "distribution" phase is where the real strategy happens. Enter the Systematic Withdrawal Plan (SWP)-the most efficient way to give yourself a "self-made pension" without losing control of your capital.

An SWP allows you to withdraw a fixed amount at regular intervals (monthly, quarterly, or annually) while keeping the remaining investment corpus invested. This ensures continuity, discipline, and predictability in cash flows.

Why SWP Feels Different from Traditional Income Options

Unlike fixed deposits or interest-based products, SWP works on flexibility and efficiency.

• You decide how much to withdraw and how often

• Your remaining investments continue to participate in market growth

• Withdrawals are structured, not emotional or reactionary

In other words, your MF portfolio doesn’t stop growing just because it starts paying you.

The Power of Partial Withdrawals

Here’s what many investors overlook: When you withdraw through SWP, only the units equivalent to your withdrawal are redeemed. The rest of your money stays invested and continues to compound. Over time, this balance between growth and income can:

• Extend the life of your investment corpus

• Reduce the pressure of timing the market

• Help maintain purchasing power despite inflation

Your money keeps running-even as it feeds you.

The Math That Changes Everything

Assume you have a retirement corpus of Rs. 1 crore and require approximately Rs. 50,000 per month to meet your regular expenses. You plan to withdraw this amount consistently for 15 years.

You have two options to generate regular income from your investments: a Bank Fixed Deposit (FD) or a Systematic Withdrawal Plan (SWP) through a hybrid mutual fund.

For Bank FD: SBI FD Rate is Considered as on 15/12/2025. 

 **Assuming Investment in Hybrid Funds and an average return of 9.62% p.a as per AMFI Best Practice Guidelines Circular No. 109-A /2024-25, Dated September 10, 2024. “Past performance may or may not be sustained in future and is not a guarantee of any future returns”.

• Initial Corpus Protection: In the Bank FD scenario, your initial Rs. 1 crore remains exactly Rs. 1 crore at the end of 15 years. This means your wealth has not grown; it has simply stayed stagnant. 

• Wealth Multiplier Effect: In the MF Hybrid Scheme, despite withdrawing the exact same amount of money every month, your final corpus grows to over Rs. 2 crore. This is more than double your original investment while still paying you a regular "pension".

• The Power of Returns: The difference lies in the return rates. While the FD offers a steady rate, the Hybrid Scheme's return allows the remaining capital to compound significantly even after the monthly withdrawals.

But Wait, There's a Tax Story Too

One of SWP’s most underrated benefits is how tax-friendly it can be. Each withdrawal consists of two parts:

• Principal (not taxable)

• Gains (taxed as per capital gains rules)

This often results in lower effective tax outgo compared to traditional interest income, which is fully taxable. For investors seeking regular income, this difference compounds quietly-but meaningfully-over time.

When you withdraw Rs. 50,000, you're not pulling out Rs. 50,000 in gains. You're redeeming units that contain both your original investment and profits. In Hybrid funds held over a year, only the Long-Term Capital Gains exceeding Rs. 1.25 lakhs annually are taxed at 12.5%.

Compare this to a traditional pension or Fixed Deposit interest, where every rupee is taxed at your income tax slab-potentially 30% or more. For someone in the 30% bracket, that's around Rs. 15,000 tax on Rs. 50,000 of FD interest versus minimal to zero tax on the same SWP withdrawal.

Over a decade, that tax arbitrage alone could save you lakhs.

Important Points to Consider in SWP: The Golden Rule

While an SWP is a powerful tool, its sustainability depends on one critical metric: the Withdrawal Rate.

To ensure your cash flows last as long as you do, keep these guidelines in mind:

• The Sustainability Gap: Your withdrawal rate should ideally be lower than the returns earned by the fund. This allows a portion of the returns to be reinvested, helping your capital grow even while it pays you.

• The 4–6% Range: Generally, a safe withdrawal rate falls between 4% and 6% of the initial corpus per annum. For example, on a Rs. 1 crore corpus, an annual withdrawal of Rs. 4–6 lakhs (Rs. 33,000 to Rs. 50,000 monthly) is historically considered sustainable in most market conditions.

• The Risk of Depletion: A withdrawal rate that is too aggressive increases the "Sequence of Returns Risk." If the market underperforms for a few years, a high withdrawal rate can rapidly deplete your principal, leaving you with no capital to participate in the eventual recovery.

• The Annual Health Check: It is vital to periodically revise and check your strategy with a Mutual Fund Distributor (MFD). They can help you recalibrate if the market environment changes or if your corpus is shrinking faster than anticipated.

Who Can Benefit from SWP?

SWP isn’t just for retirees. It works well for:

• Investors seeking post-retirement income

• Individuals creating a second income stream

• Those funding monthly expenses or lifestyle needs

• Investors who want income without disturbing their long-term plans

The key lies in structuring withdrawals thoughtfully, based on time horizon and risk comfort.

How to Build Your SWP Strategy

Step 1: Calculate Your Need: Start with monthly expenses, add a 20% buffer, and factor in inflation adjustments every 2-3 years.

Step 2: Choose the Right Vehicle: Hybrid funds for long-term (10+ years runway), and debt funds for short-term or conservative investors.

Step 3: Stress Test Your Plan: Ask yourself; If the market drops 30% next year, can my corpus survive my withdrawals? If not, reduce your withdrawal percentage or increase your debt allocation.

Step 4: Monitor and Adjust: Review your corpus health every six months. If your balance is growing despite withdrawals, you're safe. If it's shrinking faster than expected, recalibrate.

The Bottom Line

“Wealth is not just about what you accumulate, but how intelligently you use it.”

A Systematic Withdrawal Plan allows your money to do what it was meant to do-support your life without being exhausted by it.

If you’ve spent years building your investments, perhaps it’s time to let them start paying you-systematically, sensibly, and sustainably.

Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully before investing. Past performance may or may not be sustained in future and is not a guarantee of any future returns.

Friday, January 9 2026
Source/Contribution by : NJ Publications

The beginning of a new year feels like a fresh notebook-clean pages, new possibilities, and a chance to do things better than before. While many of us resolve to eat healthier or exercise more, there's one resolution that often gets overlooked yet has a lasting impact on our lives: checking the health of our finances.

As Peter Drucker famously said, "The best way to predict the future is to prepare for it."

A simple financial health check at the start of the year can help you stay confident, prepared, and in control-no matter how the markets behave.

1. Move Beyond "Returns" and Check MF Portfolio Quality

Many investors judge their MF portfolio by one number: returns. That's incomplete-and sometimes misleading. A deeper check asks:

• Is my MF portfolio diversified across asset classes?

• Am I overexposed to a single theme, sector, fund or investment style?

• Does my allocation reflect my current life stage-or a version of me from five years ago?

Strong MF portfolios aren't built for yesterday's markets. They're designed to survive uncertainty and still grow.

2. Align Money With Life, Not Just Markets

Your investments should mirror your life priorities-not market trends. Ask yourself:

• Which financial objectives are critical over the next 3–5 years?

• Which priorities are focused on long-term wealth building?

• Are near-term financial milestones protected from market volatility?

When investments are clearly mapped to timelines, market noise loses its power.
Clarity reduces anxiety far more than market predictions ever will.

3. Check Your SIP Discipline

Market ups and downs are part of the journey, but consistency is what builds wealth. SIPs work best when they're reviewed-not ignored.

Instead of asking "Should I stop my SIP?", ask:

• Am I under-investing relative to my income growth?

• Are my SIPs aligned with the right risk profile?

• Do my SIPs still match my investment horizon?

Markets reward discipline with direction. A well-structured SIP strategy turns volatility from a threat into an advantage.

4. Review Asset Allocation and Rebalancing Discipline

Asset allocation is the backbone of long-term investing, yet it's often ignored after the initial setup. Ask yourself:

• Has market movement skewed my equity-debt balance?

• When was the last time my MF portfolio was rebalanced?

• Am I letting emotions, rather than structure, guide allocation decisions?

Periodic rebalancing enforces discipline-selling high, buying low-without emotional stress.

5. Risk Isn't Volatility-Unpreparedness Is

True financial risk isn't market fluctuation; it's being unprepared when life changes. This is the year to check:

• Do I have adequate emergency liquidity?

• Is my insurance coverage sufficient for today's responsibilities?

• Would a sudden income disruption force me to exit long-term investments prematurely?

A resilient investor doesn't avoid risk-they manage it intelligently.

6. Use Expertise as a Strategic Advantage

The most successful investors don't do everything alone. A structured annual review with your distributor helps:

• Rebalance without emotional bias

• Improve tax efficiency

• Ensure compliance with changing regulations

• Keep long-term priorities on track despite short-term distractions

Good guidance doesn't predict markets-it protects decisions.

The Investor's Edge for the Year Ahead

"Wealth is not built by reacting faster, but by preparing better."

Starting the year with a proper financial health check gives you more than numbers-it gives you control, confidence, and continuity. In an unpredictable world, that's a powerful advantage.

This year, don't just track your investments. Strengthen the framework that supports them.

Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully before investing. Past performance may or may not be sustained in future and is not a guarantee of any future returns.