This Rakshabandhan gift your sister a long-term and secure investment plan

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Rakhi Investment

Author Amar Pandit, is CFA and Founder of Happyness Factory

A sister may shout, scream or chase you around the house when she’s mad but she never fails to pour her heart out when the time is right. To celebrate this bond and love, the festival of Raksha Bandhan is celebrated all over India. While you scratch your heads to think what you gift here, we’ve come up with an idea. Retire the ideas of chocolate, sweets, money, etc. that might last a day or max a month — this Rakshabandhan gift your sister a safe future or memories that last a lifetime.

Start by deciding what you want to give your sister. It can be anything from a vacation in Maldives, diamonds, to helping her start her own company. You can also think of taking a much-awaited sibling road trip or gifting her a house or car she has always wanted. Sounds impossible? It isn’t. All you need to do is follow the three-step process of plan, process, and product. A simple way to do is to use the goal-based system.

Let’s dive deeper into the first stage of planning. Start by first identifying what is it that you want to gift. This will become your goal to achieve that you can further divide into three buckets:

  • Short-term Goals: Goals like a road-trip etc. that are coming up in the next 1-2 years should be in this bucket. These are funda that you will need in the immediate future and is thus advisable to keep this money in a Liquid, Arbitrage Fund.
  • Medium-term Goals: A startup fund or an international trip that you want to gift and will be part of a 2-5 year goal will be under this category. Invest in Debt and Balanced Mutual Funds for goals under the medium-term bucket.
  • Long-term goals: Anything that crosses the 5-year mark like buying an apartment or a beach house should be added to this bucket. One of the best options in investment would be Equity Mutual Funds that allow your money to grow over the long term.

It’s crucial to know what and how long your goal is before investing your funds. Once you have finished planning your goals, it’s time to dive into the process of how you are planning to achieve these goals. Lastly, decide where your money needs to be invested. There are many options available in the market right from FDs, Insurance products to Mutual Funds, etc. Pick and chose the one that works best for you.

While one side of the investment coin is goal-based planning, the other side is avoiding mistakes that might push you away from your goals. Here are a few things to keep in mind when you plan to invest and grow your funds:

  • Don’t rush into financial decisions that blind you with immediate returns. The crucial factor when it comes to increasing your money is to be consistent and not calculate everything in terms of profit. Short-term performance indicators aren’t the right metrics for success.
  • It may seem like the right decision to listen to Bankers, insurance agents, etc. who amaze you will excellent returns, it’s actually not! They often tend to sell plans that aren’t useful for the long run. This leaves you with plans that have little to no purpose.
  • Opt for a SIP that will help you stay disciplined and also make hassle-free investments. Investing through a SIP enables you to make regular monthly payments thereby investing at different market cycles.
  • Always start early because that will help you in achieving your goals without significantly compromising your current lifestyle.

What’s a better way to thank your sister than gifting her, something that will always be remembered. Opt for a goal-based approach to turn her dreams into reality. This Raksha Bandhan let her feel the love you have in store.