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Manish M Tulasi
ย โขย
Mitra Robotย โขย 9m
Mutual Funds: A Closer Look at the Real Returns Many people say that mutual funds are a great investment, but have we truly calculated the real returns, considering all factors like inflation and taxes? Let me break it down with a simple example. Initial Investment: โน25 Lakh Over a period of 10 years, let's say your โน25 lakh investment grows to โน50 lakh. Thatโs a โน25 lakh gain, right? Now, letโs factor in inflation at 6% per year: After 10 years, the value of โน25 lakh decreases due to inflation. Adjusted for inflation: โน25 Lakh (initial) ร 6% inflation annually = โน13 Lakh loss in purchasing power over 10 years. So, your โน50 Lakh at the end of 10 years is effectively worth โน37 Lakh in today's money after inflation. But wait, thereโs more! Taxation: The government will tax your โน25 Lakh profit (after inflation) at 10%, so: โน24 Lakh ร 10% tax = โน2,40,000 tax payable. Now, let's subtract the tax and the inflation impact: Profit after tax and inflation: โน25 Lakh (initial profit) - โน2,40,000 (tax) - โน13 Lakh (inflation loss) = โน9,60,000 - โน10,00,000. So, over 10 years, youโre left with just โน9-10 Lakhs in profit, or approximately โน1 Lakh per year. Now, ask yourself: Is this really such a great return? Mutual funds may offer growth, but when you factor in inflation and taxes, the net returns might not be as impressive as they seem at first glance. Letโs make smarter, more informed investment decisions!
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