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Why Mutual Funds are the Best Investment Strategy for Young Woman

Roboadviso     Financial Planning,Mutual Funds     Posted On, Sat 7th May, 2016     No comments
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Why Mutual Funds are the Best Investment Strategy for Young Woman

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A woman has to plan smartly and focus on the right investment instruments, not just for wealth creation for her family but also to fulfill all her goals in life.  Generally, these are the goals in a young woman’s life

  • Marriage
  • Education for Children
  • Building a corpus for herself
  • Travel or doing things that she wants to do

Marriage  

Today’s woman, especially an independent working woman would not like the idea of her parent’s spending money from their hard-earned savings on her marriage.  She would rather save money, invest it wisely and accumulate a corpus that can not only be used for her marriage but honeymoon too.  So, if your marriage is 5 years away, you can invest some money in a well chosen balanced fund and follow the SIP route to wealth creation. If your marriage is seven years away or more, you can opt for investing in equity through the mutual fund route.  If you are going to be married in the next few years, you can invest some money in a liquid fund through SIP, so that you can withdraw whenever you want. In any case, the invested money will fetch you higher returns than bank deposits.

Education for Children

Every parent wants the best, high quality education for their kids. If you are a smart lady, you can start now.  Even an SIP of just Rs. 450 every month can help you accumulate a corpus of Rs. 10 lakhs  to fund your child’s higher education.

Building a corpus for yourself

Invest in a tax-saving equity mutual fund to create wealth on a long-term basis.  Even if you invest Rs. 5000 every month (SIP) for a period of ten years, on an average, you will have accumulated Rs. 13 lakh with an annualized yield of more than 15 percent.   By your retirement, you will have accumulated an enviable corpus of wealth.  It is much better than parking you money in a bank or conservative assets that do not yield profits like an equity fund would do, on a long-term basis.

It is ideal to decide on the money that you would invest as SIP amount in accordance with the goals you have in mind – whether, it is travel, retirement planning, starting a business etc. You need to assess your risk-taking ability – would you be able to stand volatility in the markets and bear losses in the first few years for exceedingly high returns in the long term? Or would you be happy with regular and stable returns on a consistent basis?  You can take the advice of your financial advisor and invest in the right mutual fund instruments in accordance with your goals, on a time-bound basis.

Mutual Funds exclusively for women

There are some mutual funds like UTI Mahila Unit Scheme (balanced fund), that empower women with financial freedom. These funds help women with greater financial stability and offer capital appreciation For the UTI Mahila Unit Scheme; the woman can be an Indian or an NRI, above 18 years of age.

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