| Investing in mutual funds for income is not a good | | | | compares to the industry standard of 3-6.7% or |
| investment; it holds too many variables and | | | | higher, (that is $67. For every $1000 invested). |
| uncertainty. For one thing they are very illiquid, | | | | This is how I recommend you invest in index |
| they are very expensive to manage and because | | | | funds. You should have 75% to 80% of your |
| the percentage of mutual funds that loses money | | | | savings invested in index funds, because we know |
| is so high, it makes it very likely that you will lose | | | | that they will do as good as the stock market |
| money if you invest in it for a short period. Thus | | | | does over time. |
| trying to earn a weekly or monthly income from | | | | Even if the stock market fall off a cliff, it always |
| mutual funds is almost impossible. Yes it can be | | | | comes back right? Now if you remember reading |
| done if you have a really huge portfolio of | | | | in one of my recent article "Dirty Secrets of the |
| $10million or more. | | | | Mutual Fund Industry" I told you to diversify both |
| Today I am going to show you the proper way | | | | by sector and percentage. These companies has |
| to invest in mutual funds to build yourself a | | | | all the right index funds, that allows you to do |
| financial empire for your grand children. Notice that | | | | that, You put 15%-20 % of your money into the |
| I said grand children, because mutual funds are for | | | | US large cap index funds, 15%-20% into US small |
| long term investment, the longer you invest, the | | | | cap, index funds, 15% -20% into emerging |
| better your chance of making a decent return. | | | | markets index funds, 15% into Asia pacific, |
| Note that if you find a solid company to invest | | | | 15-20% into euro index fund and 10 to 15% into |
| into for the same period as the mutual fund. Your | | | | the mining and natural resources and 10- 15% into |
| return will almost always out perform any mutual | | | | precious metals. |
| funds. Consider this as well, the risk will also be | | | | Let me make a disclaimer here: I am not |
| much greater than the mutual fund investment. | | | | recommending any mutual fund company nor am |
| Over the coming weeks and months I will be | | | | I getting any compensation for telling you about |
| writing as series of articles on topics such as: | | | | index funds. Also i am not giving personal financial |
| ETFs, Stocks, Bonds -commercial, Income Trust, | | | | advice in anyway; I am just stating my own |
| REITs, Virtual Banks Company Drip programs and | | | | opinion. You should always seek proper financial |
| Profit sharing and much more. | | | | advice before you invest. |
| Since 99% of mutual fund loses money. If you | | | | By investing this way you are covered across all |
| invest for 50 years, you may lose money for 35 | | | | the sectors and because you are in the index |
| years, (having negative returns). In the other 15 | | | | funds, you are not spread too thin. To manage |
| years you might make a profit, some years you | | | | your investment you can spend about 1 hour |
| will do extremely well. The 15 years that you | | | | every 6 months or even once per year to adjust |
| make money will average out and hopefully give | | | | them. When you are doing your adjustment, take |
| you are turn of let us say 8% to 15% if you are | | | | a look at what is under performing and adjust |
| luckily. | | | | that to give a bigger portion to the over |
| The best way to invest in mutual funds is to buy | | | | performer. Money will grow over time, that is the |
| the fund that tracks the stock market; statistics | | | | law of compounding interest. |
| shows that the stock market will always go up. If | | | | In 1965 a couple gave $25,000 to a young |
| you buy this fund it will always go up too. | | | | investor to invest for them. In 1998 when the |
| These funds are call index funds You can find | | | | wife pass away, her investment was worth |
| some mutual fund companies that charges as little | | | | $750million. That is the power of compounding |
| as 0.18% to manage their index funds, that is | | | | interest working; In just 33 years of 22% annual |
| about $1.80 for every $1000. Invested. That | | | | return, turn $25thousand into $750million. |