Every parent wants their offspring to have all the happiness in the world. Parents start planning for their children’s future even before conceiving them. That’s because in today’s time happiness comes at a cost. Be it nurturing your baby, sending them to school, tuition fees, extra curricular activities like badminton, swimming or cricket coaching classes, everything comes at a cost. Parents want their children to go to the best school, gain the best possible education, go to a reputed college and pursue high education from a foreign university. They want to give their kids everything that they couldn’t in their young age.
Child investment plans can be one way to build a decent corpus for your child’s destination wedding. The most important expense of a parent for their child is their wedding. It is believed that Indians work hard all their life only so that they can give their son or daughter a memorable wedding. Indians are known for their lavish weddings. But to fulfill this life long dream of a destination wedding or a lavish wedding, one needs to have a decent corpus. Of course there are loads available for weddings but these are personal loans that come with high interest rates. You do not want to burden yourself for the rest of your life by getting a loan for your child’s wedding. A wedding is supposed to free a parent from all their parental responsibilities. An average wedding costs anywhere between Rs. 15 lakhs to Rs. 20 lakhs. Keeping inflation in mind, these costs are bound to double by the time your infant transforms into a matured adult.
There are conservative schemes available for long term investment but such schemes offer low interest rates. You may or may not be able to achieve the wedding corpus by only investing in traditional investment instruments. In order to achieve your life’s long term goals one can start investing in mutual funds.
Mutual funds are considered to offer decent capital appreciation over the long term. Depending on your risk appetite, investment objective and risk appetite, you can invest in mutual funds. Mutual funds are known to offer diversification as well. It is less likely for all the asset classes to perform in a similar manner in tandem. SEBI (Securities and Exchange Board of India), the regulatory body for mutual funds here in India define them as, “a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.”
Invest in mutual funds to give your children a grand wedding
Mutual funds offer a smart investment option in the form of SIP. Systematic Investment Plan or SIP is a smart and convenient way to invest in mutual funds. SIP works best with mutual funds like equity funds as they allow investors to invest small amounts at regular intervals instead of making a one-time lump-sum payment. Parents can also refer to an online SIP calculator to get an estimate of their long term capital gains that they might earn through SIP. With SIP, all one needs to do is complete a one time mandate following which every month on a fixed date a predetermined sum is debited from your savings account and electronically transferred to the mutual fund. One can continue investing in mutual funds via SIP till their investment objective is achieved. To build a grand wedding corpus one needs a long term commitment. SIP amounts tend to multiply over the long term thanks to the power of compounding.
It is better to start investing in mutual funds early so that you have more time in hand to build a commendable corpus for your child’s grand wedding.