Do mutual fund terms still confuse you? Let’s help. This article explains some common mutual fund terms in simple English.
Mutual Funds ?
Let’s start from the beginning, right? A mutual fund is similar to gathering funds to buy a box of pizza from a chef. Mutual funds pool money from various small investors to make massive investments at once.
The Fund Manager ???
The fund manager is like the chef who you trust with your money to make a great pizza. After pooling the money together, he goes around to source the right materials to make a great pizza. In essence, the fund manager is the professional who oversees the money invested in a mutual fund; to make sure it earns more money.
The Trustee ??⚖️
To ensure the chef does things right, you need someone to monitor that he delivers the exact pizza he promised. So, a supervisor steps in. That’s exactly what the trustee does. Trustees ensure that fund managers invest your money rightly and earn you correct returns.
The Registrar ???
Now, what if the pizza gets ready and the chef claims you didn’t pay him? Well, that will be impossible if you had a legitimate receipt right? A registrar, in the case of a mutual fund, provides you with that receipt.
Mutual Fund Types ???
Just as you have various pizza types, you have mutual fund types. The common ones are equity funds, fixed-income funds, and balanced funds. Equity funds invest your money in shares of high-flying companies that are carefully selected. While fixed-income funds invest in low-risk investments that are backed by a promise - government debt for instance; in which the government borrows x and agrees to pay back with a certain percentage. Finally, balanced funds. As the name suggests, they mix the earlier options.
Risk Assessment ??♀️
Moving on, every good chef should understand how much spice you can handle before making your pizza, right? So, they ask and craft something in line with that. We at Cowrywise are good chefs also. Before you invest in any fund, we take you through a spice test (risk assessment). Based on the results, we suggest the best-fit funds for you. Equity mutual funds are very spicy, that is they are for high-risk investors. On the other hand, fixed-income funds are a little bit spicy, while balanced funds are moderately spicy.
You can take a simple risk assessment and Get started.
To better explain these mutual fund terms, we made this video for you.
Ex – shopaholic here ?
Some days, it’s difficult to ignore the sales – genuinely so ??
But a locked plan plus the fear of going back to the past (the time when I had no personal savings but still thought I was living the good life??♀️) keep me going ??
No 7!!
I’m going to remove my card ASAP! :sob:
No. 4. very important
Always know your needs and your wants .. not all WANTS are NEEDS
We make that mistakes countless times , buying the things we don’t really need and later regret buying them but worse still keep repeating same mistakes again and again ??♂️.
Bye bye to buying by impulse ?
I am not sure if I am a shopaholic. You know that saying that you can’t know how you will behave in a particular situation if you haven’t been there.
I have mastered the art of taking time before buying anything. I also try to explain to a friend if I am at a crossroads of either buying or letting go.
Most times, we don’t know there is a difference between want and need because of love at first sight. Asking someone might help.
I love tips 5 & 7. 5 is important for everyone, we have been deceived to believe that we are saving money when we go for discounted goods (lol), my eyes do clear.
For 7, I have found myself several times letting go of buying something because my credit card isn’t near (this is my table)
All the tips are helpful.
Couldn’t help but scream for joy reading this article. . truly intentional limited cash develops your Survival skills . .by force!! – Lock your Funds today & Help your future finances!
As an ex – shopaholic., such habits comes with sinking emptiness and a certain point in Life it could be quite destructive.
Cowrywise indeed makes such transformation journey a lil’ easier.
????ope why did I have to open your mail just let me get this ear pod on discount in peace na ??