We’ve all heard of Goal Based Investing and SIPs as a way of achieving those goals over
the long term. Well ofcourse that’s right, but there is another aspect to investing through SIPs that has
been largely overlooked.
There are multiples of different categories of Mutual Funds which have their own
suitability to different kind of objectives being tagged to them, in terms of the term available, priority
of goal and individual risk profile. While most of us choose Equity Funds for long term targets and Balanced
Funds for medium, we tend to ignore an entire class of Mutual Funds which not only provides the much-needed
cushion to long or medium term portfolios but also is the best short-term goal instrument in the market right
now. Debt might actually pay back more than your savings account or RD!
Most of us either keep funds idle in a savings account waiting for that annual premium
to become due, or for the school fee payment time or any other similar once in a year expense. Some of us
attempt to pay them from the income due to be received in the respective month or through credit cards.
A lot of us also have these expenses falling in the last quarter because maybe that’s when we had earlier
rushed to subscribe to the expenses to save on taxes as the month of March was approaching. Whatever the
reason or the set of complexities from the above that may hold true for us, it does for some time cause a
bit of turmoil in the otherwise smooth sail of a year.
But what if all this could be avoided with a tiny bit of modification in your plan.
Simply divide the annual expenses by twelve and begin an SIP in the right Debt Mutual Fund. It really that
simple. It will take care of all your annual expenses just like that. All you need to do is be ready to
make small monthly contributions that will eventually payoff the larger annual expense and also fetch you
a bit higher return than you would have made otherwise. Just select right fund. If you need us to talk
you through, just send us your contact details in the form below and someone from Gravity Wealth
Management will get in touch asap.
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