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“Life is what happens to you while you are busy making other plans.” John Lennon
And inflation is what happens to you whether or not you have made those plans. So it’s a good idea to pull up your socks in case you haven’t.
Look at it this way, you have Rs. 100 which you pay for your daily commute to work. It’s from the savings you have made over the years that’s lying unused in your account. A year later, however, the same Rs. 100 doesn’t afford you the same ride. That’s because its worth has gone down to Rs. 91 with an inflation rate of 9%* and petrol costs have gone up and increased the daily fare.
*for illustrative purposes only
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Patience is key when it comes to Mutual Funds.
Mutual Fund Investment is a long-term game, which is why some people are skeptical of investing in it. You can’t invest today and expect immediate benefits tomorrow. Patience is key as is the wisdom to invest in funds that can help beat the rate of inflation for you. The more you delay investing, the more time it takes for your investments to build enough wealth to account for future inflation. If you have any long-term goals like saving up for your retirement or securing your child’s higher education, long-term financial planning becomes essential.
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Your savings today may not be enough for tomorrow.
Inflation will ultimately eat into your earnings, so it’s necessary that you stay ahead of the game. As mentioned earlier, the value of Rs. 100 today may not be the same a few years from now. Ensuring that your savings are enough to meet your future needs would require you to invest in time sensitive products that meet your risk appetite and return expectations. More popular options like Fixed Deposits and Public Provident Funds have lower risk and lower returns.
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Isn’t MF a high-risk investment?
Funds give you better returns over a longer period, but since these returns are not guaranteed, it’s up to you to take that risk. When unsure about a product, you need to speak to someone you can trust before making a decision. CitiChoice by Citi recommends funds shortlisted through specific quantitative and qualitative methods, where you benefit from the extensive research of experts, no matter what your risk profile. You should invest for a minimum of 3 to 5 years, if not more, for risk-adjusted returns.
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It pays to have a disciplined approach to investments.
Investing in mutual funds via Systematic Investment Plans (SIPs) could be one of the options you look at, depending on your risk profile, as you are benefitting from the guidance of experts and keeping inflation in check. Adopting a disciplined approach to investments makes sure that you’re putting away some money every month, and helps you manage market volatility better.If you are wondering where to start, simply login to your Citi Mobile app and click on ‘Grow your Money’ for comprehensive investment lessons and a step-by-step guide to investing with Citi.
If you have some plans for the future that need you to put aside some money now, click on the SIP Calculator to check how much you need to save.
May the growth be with you!