Knowledge Can Make You Richer!

Several times Mutual Fund distributors purposely try promoting NFOs or other funds and tell investors to exit their present mutual fund investments to enter NFOs.

Usually after a period of one year is over and an investor no longer has to pay any tax on returns made, they are asked to exit a fund they have invested in and enter some other fund.

Now if you think a bit more about it, you will notice that one of the main reasons behind this is that the distributor makes money only if you churn. If you stay invested there is no revenue for him. Most of the times it makes more sense to stay invested for the long term and not keep moving from one fund to another year after year, unless the fund is giving you bad returns.

If more investors knew about this, imagine the amount of time and money they could have been saved.

The reasons retail investors get carried away is because they assume that a Mutual Fund distributor might know more than them. This is not necessarily true if you read a little and invest in knowledge. Remember that everybody does what is in his or her best interest.

Of course there will always be people who don't have the inclination to gain knowledge and thus would be willing to be an extra 2.5% and also willing to follow whatever is being told to them. But I am sure you are not one of them and are hungry for knowledge.

For instance at the moment I am investing in a company which has a huge land bank worth at least 2-3 times more than the present stock price. Investing in this company is just like buying a one-rupee coin for fifty paise. Just the knowledge of this land bank can help create a lot of wealth over a period of time. I also like having a long-term horizon, as it is the best way to create wealth in a sustainable manner.

If you want to create wealth the first investment you need to make is in knowledge. I speak from experience.

Happy Wealth Creation!