Investment Funnel


Greetings. All of us want our hard earned money to work for us and get us the desired growth so that the objective of the investment is achieved. While we try to do this, just understand how our mind woks and how money works for us.
1. Income and Savings.  –Savings funnel  Y
While we have an income, the amount we are able to save varies from individual to individual and that depends on your expneses. While income generally is from one souce, one has to plan for three types of outflow.
a. Regular monthly expenses for food, shelter and basic necessity.
b. Some savings to create an Emergency fund
c. Some investment to create wealth for a planned and or pre determined goals.
Many of us find it difficult to meet the first one and even saving a 5% is an arduous task
Assuming we are able to save 5%  the income and savings funnel would like the one below
Inline images 1
2. Expectation Funnel – Inverted Y
While one is able to invest only 5% of his earnings the expectations are that it must be 100x returns.
Though the time line is not clear, the earlier it happens, one feels elated about that.
In order to get this, he looks for opportunities to invest in instruments which can give such returns.
The expectation funnel looks like this.
Inline images 2
3. The working funnel – Horizontal Y
While we are free to expect anything, one must understand, how money works.
Generally money grows with time and compounds with time.
Money works when you invest, like the illustration below.

Inline images 4

Now the question that comes is that, are there investment opportunities  which give 100x returns.
Yes Shares do give such great returns but comes with a great risk. Also choosing the right share is a challenge.
Mutual funds are other instruments where one can invest. They are less risky, as they are well diversified. Do we have any funds which deliver such returns.
This is just an example there are similar funds which may be available for investment and getting huge returns over a time frame.
Look at the Reliance growth fund, which has delivered over 83 times returns.  IN the first 10 years , it was flat and it diverged in the next 10 years.
Inline images 5
1. It does not matter how much you are able to save out of your income, as long as you save. If you are not savings, you need to really do a budgeting exercise,
2. What ever you save, you must invest.
3. You need to give money the time to work and you can get good results over a period of time.
Do start investing now.   The word Invest  has two part IN & VEST – you have to put the money in and give it a Vesting period for it to work and produce result.
Happy investing. and as usual I am available to help you out in this and do contact me
varadharajan VS

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