Which Financial Goals Can You Fulfill With Mutual Funds?

If your life is to be defined in one single statement, it may read like this:

“You work hard to earn money and then spend it to fulfill diverse needs in life.”
Simple and straightforward, isn’t it? However, if you spend all that you earn, you may not get to fulfill life goals that require a bigger sum of money. This is where financial planning plays a vital role. Smart planning will make sure you find the right way to manage your finances and make sensible investments.

A mutual fund is one such popular financial instrument through which you can invest your money to earn good returns. It is more like a pool of money collected from several investors to invest in equities, bonds and similar other assets.

Wondering about financial goals you can achieve with strategic investments through mutual funds? Here are some:

1. Buying a Bigger Home for Your Family

For many Indians, buying a new home is a distant dream. Plus, investing in a new home through a home loan requires a kitty for a down payment first and then for the loan EMIs. You might have thought of gifting the comfort of living a bigger home to your family members. But a lack of savings and other financial priorities in life can delay this dream from coming true.

Don’t just think, but plan to pay for your dream home through mutual funds investment in India. For instance, you can invest in diversified equity mutual funds for ten years and use the dividend to buy a new home.

2. Planning A Trip to a Foreign Country

A road trip with friends or a solo trip to Leh-Ladakh does not require a lot of money. However, you need to have a bigger budget for a trip to some foreign land, be it Paris, New York or Singapore. Saving a specific amount every month in your bank account won’t give you enough returns to achieve this goal in life.

If your regular income is not enough to pay for such a trip, plan for its expenses through mutual funds in India. One way is to invest in equity-oriented mutual funds in a SIP for a few years to build a corpus of three-four lakh rupees to fund your foreign trip.

3. Funding Your Child’s Education

Amidst the rising cost of education in India, it is difficult to afford a child’s educational needs without proper planning. A strategic mutual fund investment decision will ensure your child gets the best quality education he/she deserves.

So, start investing in diversified mutual funds right from the time your little one is born. Assuming your child will begin schooling after three years, invest in aggressive hybrid mutual funds. Over a period of three years, you can earn around 5% to 10% returns as per the funds’ objectives and wordings.

Similarly, you can plan for your child’s higher education through a SIP. Fifteen to twenty years down the line, you will have enough money to pay for educational expenses related to a private college in India or a foreign university.

4. Mapping Out Your Retirement Fund

After your work life ends, you will still need money to pay for your regular expenses. It is better to plan for your finances for that age now than depending on others later.
If your retirement age is far away, that’s even better. You have around thirty-forty years to plan for it. Start investing your money in high risk – high return mutual funds in India for this life goal and plan a stress-free retirement.

A mutual fund is a simple yet efficient way to ensure you get to live your life goals. Other than the ones mentioned above, you might have other goals as well for which you need a bigger corpus. Move a step closer to all your goals with the right mutual fund investment decisions.