You can earn a regular monthly income just by investing a substantial portion into mutual funds. However this may include the impending tax liability.
In a mutual fund query, an investor wanted to know where they should invest to earn Rs 50,000 on a monthly basis, a report by ET Mutual Funds revealed.
“I am looking for a monthly income of Rs 50,000. Tell me how to go about it? How much investment is required? Whether one-time investment or SIP? I need low-risk funds and only equity schemes,” the query read.
Time period for investment plays a crucial role in drawing out large sums on a regular basis. Investing in the equity market has proved to be fruitful for some who have garnered huge returns but not for others.
ClearTax, tax solutions website defines investing in the equity market as a ‘speculative activity’. "Investing in stocks should not be equated to trading in the stock market, which is a speculative activity."
To draw a sum of Rs 50,000, the analyst replying to the earlier query suggested that the person should be clear on time period of investment.
“If you are looking for an immediate income, you need to invest around Rs 1 crore to draw an annual income of Rs 6 lakh per year. This is assuming an annual return of six per cent. Also, you do not invest in equity scheme via an SIP to draw regular income. Equity schemes are recommended to create wealth over a long period. To draw regular income, debt schemes or debt-oriented hybrid schemes are better.
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