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PLANNING FOR A WEDDING? HERE’S HOW MUTUAL FUNDS CAN HELP YOU

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Mutual funds, mutual fund investments, invest in mutual funds, investing in mutual funds, SIP, systematic investment plan, SIP calculator, investment options, type of investments, equity funds

Indian weddings are known for their extravagance around the world. There’s food, there’s light, there’s music, there’s dance. However, the color you see at most Indian weddings is gold. And all that glitter comes with a cost, quite a hefty one. Wedding expenses have witnessed a huge upsurge in the past few decades. So how does one manage these costs without going bankrupt? If you don’t want your wedding expenses to create a huge hole in your parents’ retirement fund or wish to finance for your wedding, you need to plan your finances judiciously. Here’s how investing in mutual funds can help you create a wedding fund.

How to begin?

You can use an SIP calculator or a mutual funds return calculator to deduce the amount to be invested to reach your desire corpus. Every basic Indian wedding involves the following basic expenses that can alter your overall wedding expenses.

  1. Guest count
  2. Venue location
  3. Food expenses
  4. Number of functions
  5. Various traditional expenses

When to start investing?

Early planning for a wedding is always desirable than taking debts and falling into a debt trap to have your dream wedding. Even if you are unaware of the exact wedding date, you can still start saving for your wedding. When you start investing early, you would have enough time to save up for your wedding. You can either invest in smaller amounts through a Systematic Investment Plan (SIP) or in lump sum amounts. Another reason to invest early is so that you have enough time to invest in several investment options such as hybrid mutual funds, equity securities, etc. Investing in equity securities helps to generate better returns in the long run.

Where to invest?

As mentioned above, equity is a great option to create a wedding corpus. If you have an investment horizon of around five years, you might consider investing 40 to 50% of your corpus in equity-related securities. The equity portion can be a part of moderate-risk pure equity funds or aggressive hybrid funds, etc. You can consider investing the rest of your portfolio in debt funds to diversify your investment portfolio and offset any losses that may occur from one type of investment. Debt funds also provide a higher level of liquidity and tax-efficiency than equity mutual funds.

If the wedding is further down the line, you can invest rather aggressively to achieve a higher rate of return on your mutual fund investments. Consider investing 60-70% of your portfolio in equity securities.

However, if the wedding is near and you do not have much time, then investing in equity aggressively might not be the best decision. As the investment horizon is short and you might want to invest in mutual funds that offer higher degree of liquidity, consider investing in safe bonds, debt funds, etc.

Remember to start saving early for your wedding to achieve a higher rate of interest. Also, do not forget to diversify your investments. This will increase the stability of your investments even in volatile markets, ensuring that your wedding plans are on track. Happy investing!

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