Friends With Benefit? How Mutual Funds Work
Do mutual funds still confuse you? Let me break it down for you with an experience of mine in college.
It was that time of the semester when all we had left of the foodstuff was garri. Karen, Tomi, Shedrack and I had planned to live on garri for the next few weeks before the semester was over and save whatever funds we had left for travels back home.
Exams were fast approaching and Mr Jombadi had just announced that all his questions would come from his handout and not from the notes he’s given us. The handout, which was just ₦2,000 was difficult for us to afford.
And so, Shedrack came up with a plan. Each of us would contribute ₦500 to get the handout and then, read together. We agreed to the plan and with each of us contributing ₦500, we were able to afford the handout. After the result of the exams were released, we discovered that we all passed. Call us friends with benefit?
That’s basically how mutual funds work.
Mutual funds pool together small amounts from multiple investors and then invest the piled up funds in professionally managed and high yielding assets.
It’s just like contributing money to get a handout for the good of everyone. Here, you contribute to investing in companies like Nestle Nigeria, Dangote Cement, etc and everyone gets a share in the profit.
The best part of it is that you don’t need to have so much money to start investing in mutual funds. In Cowryrise, with as low as N100, you can start investing in mutual funds from the comfort of your phone.
So How Do You Get Started?
All you have to do is:
- Sign up for an account or log in to your dashboard if you are an existing user on Cowrywise
- Scroll down to “Invest In Mutual Funds” and click on it.
- There will be a short tutorial to get you started, and then a short test follows suit to help pick out the perfect fund for you.
- Based on your test score, you will be a list of recommended funds to start your investing journey with.
So you see? Investing in mutual funds isn’t that difficult after all is it?