Tips to plan your finances for a second honeymoon
“We shall come back after 5 years for our second honeymoon”, I said turning to my wife who stood staring with stars in her eyes at the enchantingly beautiful meadows that stretched out below us. We were literally in a paradise also known as Switzerland.
She gave me an incredulous look. I could read her eyes. There were doubt, belief, and disbelief blending into the expression in her eyes, there were a hundred unspoken questions. I understood perfectly, she was wondering how I would be able to manage another trip to Switzerland as she knew that the trip costs a bomb. I just smiled confidently at her as I was confident about my financial skills and management.
We did go to Switzerland on our second honeymoon again and probably will go there for our third as well. No, I have not won a lottery or busted a bank, all I have done is some prudent planning of my finances and some wise investments.
Plan your finances – Tip Number One
Take stock of your income and outflow and determine what amount of money you can set aside for investment every month or quarterly. The budget for all recurring expenses as well as contingency expenses before you earmark funds for investment.
Plan your finances – Tip Number Two
Decide on how much of risk you can afford to take with your money, as this will determine the investment option that you would be choosing. Another important aspect to keep in mind is the investment term and the reason for the investment, e.g., are you investing so that you can use the returns for a dream holiday or is it for some other planned expense coming your way. In short, decide on your investment goals and how much you can and want to invest.
Plan your finances – Tip Number Three
Once you are clear about your own investment profile and risk taking capacity, it is time to look at available investment avenues. Not putting all your eggs in one basket is definitely one of the dicta one should follow. It is always prudent to spread the risk by investing portions of your money in low-risk as well as medium and high-risk investment options.
One of the most popular and convenient investment options for salaried people is SIP. SIP which simply means Systematic Investment Plan helps plan your finances and enables one to invest in mutual funds and get good returns. The fact that one can invest small amounts every month based on ones’ capacity makes this kind of investment attractive. SIP is also quite convenient and simple and removes all the complexities of investing. The systematic approach also ensures cushioning against market fluctuations. For those with who are ready to take a medium to high risks, definitely investing in Mutual Funds through a SIP option is a very attractive proposition. The fact that your investment is in the hands of expert professionals is a comforting thought and you can relax and see your dreams blossoming into reality.
What the Markets look like
According to the Economic Times, 2017 is a good year to invest in stocks for the long term. Historically the Indian markets have given good returns when the long-term historical returns have been low, as is the case currently. Hence the climate is right to invest taking advantage of the low return period. Experts are of the view that systematic investment over a time range of next 3 years should see a return of 15% to 18% as compared to the current 10-year rolling return of 6.64%.
But as a retail investor, it is difficult to research and keep abreast of the constantly changing dynamics of the market and its complexities. Hence it is wise to trust your investments with reputed advisory firms. Edelweiss is one such company which has launched a fully automated quality research based robo advisory “Guided Portfolios” which understands you and plan your finances, your risk ability and creates the best portfolio resulting to better returns than the benchmark.
Summing up, the logic is very simple, a honeymoon, first, second or third would definitely be an expensive affair, especially if you want to getaway to exotic destinations like Switzerland, Hawaii, Seychelles, Maldives, South-East Asia etc.. So what do you do? Plan your finances. Plan before you dream. Invest your money and watch it grow and transform your dreams into actual experiences that will stay with you for a long, long time.
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