What’s on your mind? Retirement or the latest sedan? Retirement, really?
Not that there’s anything wrong with thinking of retirement. But let’s face it, it’s depressing. And when it comes to investments, everyone only seems to talk about retirement. While it’s important to save and invest for old age, you should also want to achieve things that make your life better.
Hello, YOLO! Buy your dream car, have a beautiful wedding ceremony, plan your honeymoon in Europe, go on a world tour, build a house on the seaside, renovate your house, there so many short-term goals you can have in life. And what better way to achieve them than investing in Mutual Funds. We agree that Mutual Funds give great returns when you invest for a long time. But there is a way to get good returns even in a short period of time. Let’s see how.
Set a timer
For a 10-15 year goal, you will find many equity-based schemes that can help you build wealth. But let’s be clear. With Mutual Fund schemes, risk and rewards change as you change your timeframe. Liquid or ultra-short-term funds are good for goals with a timeframe of 6 months to a year. Similarly, there are some amazing schemes for 5-year goals. So, it will help to spend some time on defining the timeline for your goals.
How to choose?
· For very short-term goals or emergency funds, liquid funds are great.
· But if your goal is 3-5 years away, income funds or dynamic bond funds work really well.
· Choose schemes that have performed well over a period of time.
· Always check the expense ratio.
· Exit load should not eat into your returns. So, check the exit load of the scheme. While liquid funds don’t have any exit load, income funds do.
· If market volatility makes you uncomfortable, never invest in corporate bond opportunity funds.
Well, that’s the only way to go if you want to achieve all your goals before you retire. The more you save, the more you get to invest. And when you invest more, you get to reach your goals that much quicker. The best way to do that is to start an SIP through direct debit facilities.
Retirement should motivate you to invest, but so should all the tiny goals that make up life on the way to it. Imagine achieving all your goals before you retire. Won’t retirement be even more amazing after you have gone for a world tour, have bought your dream car and made a lot of money?
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*Mutual fund investments are subject to market risks, read all scheme related documents carefully.