"Know your priorities!", very often we hear our parents or bosses tutor us with this phrase. They think that we don't know what's more important for us, at a given stage in life. However, what many people do not realize is that we can have unconventional priorities, at any given stage in life.
For instance, a chartered accountant may be dreaming of traveling whilst at his desk at work, while a struggling musician needs to create some corpus for himself, to be able to pursue his passion. Our aspirations must not go neglected due to lack of planning and fear of wrong financial investments.
Which is why, whatever your priority may be, there is a way to meet its requirements, using a fund:
#1. If traveling around the world is your calling:
a) A trip to an exotic location abroad: Traveling is aspirational and sometimes happens on impulse. To feed into this impulse, you can create an Indulgence Fund, which will gain from a monthly SIP from your salary. Read more, for a detailed plan to fulfill your traveling dream, here.
b) Your own or your parents' wish to go on a pilgrimage: For a trip to Dwarka, Kashi or Mecca, create a small Pilgrimage Fund, wherein you put 3% of your savings into Debt Mutual Funds. This will ensure that no dreams go neglected even after you retire. It could be your gift to your parents too.
#2. Pre-paying your home loan: We rely on loans for when we need a large sum of money at short notice or for a significant purchase like a home or a car.
If your priority is to prepay your long term loan, especially home loans, you can put your savings into a Loan Repayment Fund that invests in Equity Mutual Funds. Here's a smart guide you can refer to before taking a home loan.
#3. Children's education: More often than not, a parent plans for their child's education much in advance. This means you will have a lot of time before you actually have to pay for expensive higher education. The ideal way to go about this is to create an Education Fund and invest in Equity Mutual Funds. You are then looking at 14-15% returns in less than 10 years' time. Here's how you can save for your child's future, starting with a small amount every month.
#4. Money: Some of us may not have very concrete and planned out life goals, but it is a good idea to save a part of our income, towards building a corpus which exists to insulate you from any unforeseen events. For your comfort and goals, create a fund to cater to your money and corpus needs. In fact, if you plan this correctly, you can collect close to a million rupees within 8 years!
A separate fund for all your needs in life is easy to build if you start right.