Mutual funds?

Question

I understand how great these are....but I mean under a greedy thinking.....how rich can you actually get off mutual funds... I know they are there to beat inflation...can you get rich off mutal funds so to speak?

Answer 1

they are a better idea for retirement, not for getting rich.... they have good steady growth...if you are looking to make money fast, mutual funds arent the way to go...... thats what stocks are for....two different funds i am in have given me about 6-8% growth over the past few years... so they will make you money in a long period of time

Answer 2

you can get rich. And as far as beating inflation? Heck, if they cant beat inflation, then I wouldnt put my money there. This is because the interest rates banks give you is "supposedly" supposed to beat inflation. For the most part, they are supposed to but its iffy to say because alot of times the Feds move the interest rates down, hoping people will start spending more to boost the economy. Overall though, if economy isnt bad, then the banks interest rates should match inflation. and as far as the mutual funds, they should exceed inflation. And their rates are fairly high if you want to invest long term. The thing is, if you are going to go in and out, then dont bother. I mean, short term usually means short money. What can you gain putting in 5 or 6 grand? Even if you were to get 10%, you are not making much for the year. But, if you put 500 a month for 10 years, the money can start to accumulate like a snow ball. This is because of compounding your profits by keeping the money you made in there. 10% compounded over say, 5 years is worth alot more then 50%. So, if you are patient, and stick with it, you wont get rich right away, but you will be well off in the years to come.

Answer 3

I'm an average guy. Made an average living. I'm 8 years away from retiring. I've been investing in Mutual Funds for the past 25 years. I now have over $900,000.00 in them. I don't think many of my peers (people in my income bracket) have done as well......

I never thought in my life I'd have this much. It was the power of compounding and stock investing (via funds) that got me here.
(having a goal also helped).

I won't retire very rich.... but, I shouldn't have to worry about my retirement years.

Focus on your goal & go for it. Good mutual funds are an important part of long term investing.

Call a Mutual Fund Company. Tell them how much you want to invest each month & ask them for a "caculation" of what you might have when you retire (based on a rate of return like 8%)....... This will open your eyes (one way or another).

Answer 4

Yes, you can get very comfortable by investing in mutual funds.If you do it in IRA's you'll build a fantastic nest egg... and beat taxes two different ways...Traditional IRA's: your contribution lowers your income so your tax is reduced that year...or ROTH no tax break until you start withdrawing...then its tax-free ( someday, you'll realize what an amazing concept that is !)
Pick some good basic funds and you can ignore them for years if you want ( except of course for contributions)....or be active in moving money from fund to fund.
My personal funds after 37 years of investing amount to $ 860,000 and that was with only occasional adjustments. .. and I was a construction worker, not a bank president.
But, I also helped a friend learn to pick and move funds for the last two years and we've turned $553,000 into $ 795,000. She also worked 40 years as just a liquor dept manager in a large grocery chain... no big bucks, but just put some away!
If you do the investing outside of an IRA or 401, you have some tax work at the end of the year ( nothing major and all explained on the forms you get from your broker)

Answer 5

i think you are asking the wrong questions. Mutual funds are not necessarily meant to "just beat inflation". The best fund managers beat the S&P every year, and it is desireable that they not only beat inflation, but far surpass it. The funds i have in my own personal portfolio have 10 year averages of 15%+...

as far as "getting rich", you can only make money when you put money in, and have patience. Speculators who buy and sell stock all the time rarely out-perform the S&P at the end of the year.

Answer 6

Yes, If you reinvest the dividends.
And if you invest enough every month or two
And if you invest in mutual funds that, in turn, invest in high quality stocks, not the high flyers.

You won't get rich in 2 or 3 years. It takes a long time and a lot of patience. Good Luck.