A prominent milestone — marriage is a significant occasion that marks a new phase in one’s life. And what better way to make it a memorable event than planning a destination wedding; an exclusive experience that can bring about lasting memories. However, a destination wedding may not always be affordable. It calls for adequate funds to make a remarkable event.
With the cost of living becoming more expensive, investment in traditional instruments may not live up to one’s expectations. How, then, can one generate an adequate corpus to fund a destination wedding? Enter Mutual Funds.
How can mutual fund investments help me?
Investors who know what is a mutual fund swear by its potential to grow wealth in the long term. Mutual funds can create a diversified investment portfolio to meet all your short-term as well as long-term needs. Typically, they fetch higher returns as compared to traditional modes of investment, such as a fixed deposit or savings bank account.
There are several types of mutual funds such as equity funds, debt funds and hybrid funds. Depending on your investment horizon, risk tolerance and financial goals, you can invest in the funds that suit you.
How can mutual funds help me finance my destination wedding?
The key is to start investing early, and unlike investing for your retirement, planning for a specific event such as a destination wedding requires considerable detailing. You can begin by bifurcating the necessary wedding expenses from the ‘frills’. Essential wedding expenses are non-negotiable, for example, food for the guests. Frills could include lavish costs that are desirable but not essential.
Once you have chalked out approximate wedding expenses, you can start investing in stable return securities for non-negotiable wedding spends. Debt funds such as short-term fixed-income funds can be used for this purpose as they also offer the flexibility to redeem the money as required. You can start a Systematic Investment Plan (SIP) or invest in a lump sum if you have enough savings.
To notch up your destination wedding with an added flourish, you can consider taking some risk by investing in equity funds that fetch a higher return. Equity investments can take a longer investment period (7 to 10 years) to deliver good returns. If you are not planning a wedding so far in advance, you can consider relatively lower risky equity funds such as large-cap funds. Or, you can invest in diversified funds with a large-cap bias. You may want to stay invested for at least three years. If the yields do not build as per your expectation, you can always prolong it for a few more years and use it for your first anniversary.
Conclusion
Your dream wedding could be an expensive affair, but you can make it come true if you plan early and invest smartly. Mutual funds can be an excellent investment tool to help you finance your destination wedding. To invest in mutual funds, you have three options. You can invest in direct mutual funds, approach an asset management company for buying mutual funds offline or buy mutual funds online.