Mutual Fund Investing for Capital Gains – Loser’s Bet

Mutual Fund Investing For Capital Gains – Loser’s Bet

Recently I have published my own written eBook – My Journey To Billionaire Club: What Rich Teach Their Kids About Money That Poor & Middle Class Don’t?

You can download this eBook for FREE by clicking the above link without any annoying registrations. In the Book I have mentioned the new Rules of Money. Basically the rules of money have been changed and that’s why the financial advises also.

Since our past generations we are being taught that invest for the long term, diversify and build the wealth. Well, The only problem with such kind of investin is that, here you are investing for the Capital Gains.

Investing for the Capital gains means you are investing for the price of something (Stocks, Gold, Real Estate, Mutual Funds) going up in the future. You don’t have any other control over that investment except selling.

Say for Example, Mutual Funds. Most of the Personal Finance Advisors, Bloggers & Financial planners advise us that invest in equity diversified mutual funds for the long run via SIP, stay invested for 10, 15, 20 years, the compound interest will work in favour of you and you will make a big corpus after 15-20 years.

Well, This financial advise is very true. If you hold some asset for more than 10 years than that asset will appreciate so much that it will give you great appreciation of your money.

But my question is that, What about those long 10-20 years? I mean this is like living poor but dying rich. This is the main problem with the investing for Capital Gains only.

And today most of the people in this world invest for the capital gains only means they follow the ‘Buy, Hold & Pray’ Strategy.

Well, this strategy is good strategy rather than investing nothing and living paycheck to paycheck. But well, the true rich people don’t follow this strategy. Basically they Invest for both Cashflow and Capital Gains.

I mean they buy the assets which not only give them the Capital gains but also give them the cashflow so that they can enjoy their life as far as they own that asset.

Businesses and Real Estate (Rental Properties) are the Cashflow plus Capital Gain Assets. Of course, everyone should invest in Mutual Funds. They are professionally managed and outperform the Index.

But the basic difference between the Rich & Middle class is that, the Middle class invest their hard earned (Job Income, Salary, Second Job, Part time, Over time) money into the mutual funds while the Rich invest their hard earned money to buy cashflow (+Capital gain) Assets first and from the passive income of their assets they buy the capital gain assets like mutual funds. So this is the basic difference between the rich and middle class.

I have explained several other new rules of money and basic lessons on money in my eBook. So Download it Right away and boost your Financial IQ.