Protecting Your Finances: A Practical Guide to Avoiding Scams and Frauds in India
- Imagine a scheme that promises 30% returns every month. An individual invests ₹1,00,000, only to later discover that the company was paying returns to existing investors using the capital from new investors. This scheme collapses when it can no longer recruit new investors.
- A couple downloads an investment app that claims to provide high returns on mutual funds. After investing ₹50,000, they find that the app is a front for a scam, and they can’t withdraw their money.
Quick Checklist
- Define a clear goal (amount + date).
- Pick the right product (debt/index/hybrid) based on horizon.
- Automate SIP; review annually.
- Keep costs low (prefer direct plans).
- Avoid chasing past performance.
2-Minute Case Study
Anita, 28, aims for ₹4 lakh emergency fund in 18 months. She picks a low-risk liquid/debt fund, sets a ₹22,000 SIP, and reviews once a quarter. For retirement, she chooses a Nifty 50 index fund with a 20-year SIP, increasing contributions 5% yearly.
FAQ
How much should I invest monthly?
Work backwards from goal and date; SIP = Goal ÷ Months (adjust for expected return).
Direct vs Regular plan?
Direct plans have lower expense ratios; over time that compounds to higher returns.
When should I sell?
Review annually. Rebalance if allocation drifts by >5–10% or when a goal is fully funded.
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