For those who love to travel, the main concern is always funding. Research about the location, best place to stay and visit and other expenses depend completely on your budget. It is a fact that not every travel buff is born with a silver spoon and most of us have to work hard to cut-off one dream destination from the travel bucket list.
The best way to finance your travel is through investments. There are a lot of options such as FDs, short-term investment and savings bonds etc which can help you in collecting money for the trip but none of them will give you good returns on the funds. Rather than putting money in an FD or something similar, it is always better to invest in long-term investment plans such as Mutual Funds.
What are mutual funds and how they work?
Mutual funds are basically professionally managed investment plan in which an asset management company invests the funds in stocks, bonds, and other securities. There are a group of people who invest in the single mutual fund and the fund manager invests as per the market strategy and fund plan. Every person gets units as per the investment amount and any profit or loss is converted in units as the time passes by.
For example, if you have invested Rs.1000/- in mutual funds and price of each unit is Rs.10, you will get 100 units. After one year if there is a profit of Rs.100/- on the investment, you will get 10 additional units but if there is a loss, the number of units in your possession will decrease. However, the long-term mutual funds are most profitable.
How can mutual funds help travel buffs?
In most of the cases, it is hard to extract a large amount of travel at once. With mutual funds, you can decide the money you want to spend on a specific trip and invest money through SIPs (Systematic Investment Plan) every month. This will not put the burden on you and the goal will be completed by the time you are ready for your trip.
Short-term investments in Mutual funds are little risky so it will be better if you plan the future trips ahead of time and invest accordingly. When the time for your travel plan is near, you can withdraw the money and put it in safer investment option like FD for the smaller duration but it is completely your wish.
Mutual funds are considered good but there are risks involved. Make sure to invest in the right funds and consult a good fund manager before investing. Always invest in more than one option. You should not invest all your assets in the single fund. Travelling is always good for health as it takes you and your family away from the daily stress and tensions. Mutual funds can help you in making the travel dreams come true in the coming future. So invest today and make full use of the funds for travel purposes.