I am 22 years old and plan to invest Rs 3,000 every month to attain my goals. My goals are buying a bike in three years time and a house in 15 years time. Which category of mutual funds should I choose? Would investing Rs 3,000 a month be sufficient?
-Alagupandian
It entirely depends on which bike and which house do you plan to buy. It may be good enough, it may not be. But somebody at the age of 22, thinking to invest Rs 3,000 a month is great. Just get started. Both the goals are negotiable. If you get your bike in two and a half years, you'll be happy. And if you get it after three and half years, instead of three, that should also be okay. There isn't a deadline as in the case of child's education.
So, for this goal, invest in a balanced fund (aggressive hybrid). This will be good for you to inculcate the habit of investing. It will not scare you if the markets turn very volatile. Start investing in a balanced fund and wait until the required amount is collected. Don't borrow money for bike. If you are planning a bike worth Rs 60,000-70,000, and putting Rs 36,000 every year, you may achieve your goal in 1.5 to 2 years time. Once you reach there, take the money out and buy your bike.
And after that carry on with this plan for next 15 years. You will have enough money to at least meet the down payment. For rest of the money, borrow. Emergencies and buying a house are the only two things for which I support borrowing. Otherwise never borrow, especially for consumer goods.
This article was originally published on October 24, 2018.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
