We always believe you shouldn’t consider salary = Income, but try to find out other sources of income. At mutual funds

There are three way one can create passive income

1.SWP (Systematic Withdrawal Plan)
This is the best way to start passive income. Once Lumpsum amount invested monthly income starts from next month itself. Most of the advisors prefer Equity Hybrid Fund for SWP but at Akerkar Wealth we have different and unique way. 

There are two types of SWP.

A] Here your principle amount remains the same but you get higher monthly income e.g. *₹ 700 per month for 1 lakh…. 8.5% annual Rate of Return.*

B] In this option your principle amounts also increase slowly so you can increase your monthly income (Inflation Adjusted) in future. May be after 3 to 5 years, here one has to take 6% passive income on annualize basis e.g. *₹ 500 per month for 1 lakh... 6% annual withdrawal.*

2. Dividend Income

Mutual funds give regular Dividend on monthly basis. As per recent Taxation, Dividend income from mutual fund is tax free (< 12 Lakh). *Equity Aggressive Hybrid Fund or Balanced Advantage Funds are preferable.*

One has to be very prudent in selecting funds for Dividend as well as SWP.

3. Dividend Yield Funds/Multi Asset Funds

In equity markets there are some stocks that give regular dividends e.g. ITC, TCS.

In dividend yield funds A fund manager buys shares which pay regular dividends. Some funds buy Domestic as well as Global Equity also.

Multi Asset Funds take top down approach to Assets like Equity, Debt, Global Stocks and precious metal like Gold and Silver.

We can start SWP for monthly income from few selected Dividend yield funds and Multi Asset Funds.

Monthly income is need of everyone young and old. It can help you for your EMI, Children education, monthly household expense or your parents monthly income as well.

Blog by Mr. Santosh G Akerkar for Educational and Knowledge purposes only.

Best Regards,
Santosh Akerkar