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A 23-year-old exec can fund own wedding using mutual funds in next 5 years - Here is how
When you start working, you might have hundreds of goals in mind, starting with buying a bike/car or perhaps, a home. Getting married is probably at the bottom of the priority list when you start working. This is why most youngsters often neglect the costs involved in tying the knot.
When you start working, you might have hundreds of goals in mind, starting with buying a bike/car or perhaps, a home. Getting married is probably at the bottom of the priority list when you start working. This is why most youngsters often neglect the costs involved in tying the knot. An average Indian wedding could cost somewhere between Rs 20 lakh to Rs 5 crore, depending upon your wishlist. In most cases, the parents of bride and groom end up facing trouble as they have to sign all the bills. But, this can be changed with a bit of planning.
If you start early and save soon after joining, you can easily end up funding your own wedding within five years. However, it will require some planning. Srikanth Meenakshi, Founder & COO believes the task could be tricky as cost for a wedding can range anywhere between a few lakhs to a few tens of lakhs or even higher.
"The prudent thing to do would be to estimate a cost as of today, index it to inflation, and arrive at a potential cost in 5 years. Once that number is known, one can plan for it," he said.
Invest in mutual funds
The best instrument to invest money and let it grow would be through mutual funds. While mutual funds can definitely help create at least a part of the corpus, the investor need to choose right funds as the investment period is just five years, Srikanth explained. "If the time period of investment is just 5 years, an investor cannot take too high a risk with his portfolio. About 50-60% in equity funds is the maximum exposure that he would be able to take on," he said.
This also means that you would get slightly lesser returns than the ideal scenario. But, on the bright side, the risk involved is also less.
"The return expectation from the portfolio would need to be tempered to around 9-10%. Using this returns estimate and the value of the corpus required, a simple plan can be drawn up and we can figure out as to what extent mutual fund investments would help in getting there," Srikanth said.
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