Finance

Investment in MF scheme- A unique and valuable gift of love

With Valentine’s day gone by earlier this month, some of you may be receiving flak from your loved ones. This is probably because your cheesy gift of a box of chocolates, a bouquet of flowers or a soft toy hasn’t gone down quite well with the one you love. Or, even worse, you haven’t been able to think of an appropriate gift for your better half yet! Well, guess what? It is never too late to salvage your show of love. You can go offbeat and start a mutual fund investment. This may seem a tad left of centre, but scratch the surface and you’ll find that this gift in the form of financial planning can really turn out to be the proverbial frog prince for you. Here’s how mutual funds can help you.

A wish to fulfil

You are best-placed to know the wishes of your loved one. For instance, your partner may be planning a big birthday bash for a milestone birthday, wishing to purchase an expensive gadget or has been wanting to go on vacation to an exotic location with you. A mutual fund investment has the power to help you. That’s because these investments have the power to help your money grow over a period of time.

Investing in mutual funds can fulfil a particular goal through the systematic investment plan (SIP) route. To top it, investing through the SIP route has multiple advantages. Firstly, you can use a SIP calculator to arrive at the exact amount of money you need to invest in the mutual fund scheme. Secondly, since it is a monthly investment, chances are that it will be affordable and does not burn a hole in your pocket. In fact, you can start investing with as little as Rs 500.

A SIP is a good EMI

Instead of making a costly purchase on your credit card and turning it into an EMI later, where you end up paying 12-15% interest, you earn a similar amount of interest by investing in a mutual fund scheme. Investing in SIP is therefore similar to a “good EMI” as you build wealth as a result of your investment, rather than paying interest each month by taking the credit route.

Invest in equity SIP for the long-term

In case you want to buy a home, you can consider a long-term investment like equity mutual fund. These funds work best when they are tied to long-term goals that are at least 10 years away. This is because you stand to benefit from the power of compounding over the long term. In other words, the returns you earn on your investment are re-invested in your principal. Thus, the longer you remain invested in an equity mutual fund, the more you stand to gain over the long-term.

Long-term equity fund investment also allows you to reap the benefits of rupee cost averaging. This means you automatically buy a lesser number of units when the markets are high and a greater number of units when markets are low, thus averaging out your costs. This mechanism also saves you against the perils of market volatility.

A gift to show you care

As you can see, investing in a mutual fund makes for a more sensible gift for the one who truly means the world to you. By making such a financial commitment, you can prove that your gift is truly valuable and scores over the cheesy run-of-the-mill Valentine’s Day gift that often lose its relevance in a day or two! So, invest in a Franklin Templeton mutual fund to gain your partner’s respect in the long run.