As mothers, our instinct to save is already well-honed. The amount of money we tend to save with our shrewd decisions and intelligent spending, it is important to ensure that that doesn’t lose its value over time. Inflation is cruel with the hollowing dent that it can make on our savings. The wise path here is to invest the savings and let the money grow. Thus, investment is the way to go!
Now, investing can seem complicated or tricky as someone who hasn’t done it before. And for that, this article is all you need to know about how and where to invest and get started. Let’s begin with the basics.
Why Invest?
There are two important reasons for investing – beating inflation and accumulating wealth.
The first is the obvious one that we encounter in our everyday lives. Imagine any good or service twenty years ago – their prices would have been well below half of what they cost today. The reason for this is the falling value of a currency over time. This buying capacity decreases for several reasons and any money saved in cash is going to lose its value over time
The second reason to invest is for the accumulation of wealth. When you invest any amount of money into the markets, over time, the money is going to increase as the companies you invest in, continue to grow. With time, compounding gets to work when the profits you make are also invested back. Even at an average of 10 percent growth every year, your initial principal would double every seven years – so much better than losing value over time.
Myths About Investing
Now that you have an idea of why to invest, let’s get some misconceptions out of the way. The first myth that we want to clear out is that you do not need large sums of money to start investing. You can start with as little as one hundred rupees a month. An Indian household saves over 1000 rupees a month. If you’re wiser with your spending, you can save more.
This money, when you invest it all in an investment vehicle like a mutual fund, you can accumulate enough wealth to make a big difference in your life. This could mean getting that house that you want or helping your children study abroad that can set them up for life.
Mutual funds are investment vehicles where thousands or lakhs of people pool in their money and expert investors invest this pooled money on their behalf. This is ideal for someone starting because investing directly takes some amount of expertise which can take time and effort to master.
The common channels of investment of yesterday, like fixed deposits and savings accounts, are no longer the most feasible options as even their best returns don’t usually beat general inflation. It is time to evolve with the times and mutual funds can be your first step into this transition.
How to Invest?
The process of starting your investment journey is quite simple. You have to find a platform that provides you with an easy signup process. We recommend starting with EduFund as it is designed to keep young parents in mind.
You can also use EduFund’s college cost calculator and find out the amount of money you’d require to support your child’s future education. It includes the cost of living, tuition fees, course cost – if it’s a particular course and also includes the inflation rate. Keeping a goal-oriented approach helps you plan better and will be helpful in case of any shortcomings.
Now, once you’ve signed up, you have two options – either starting out choosing mutual funds yourself with the DIY plan or you can avail of EduCases where expert wealth coaches help you invest keeping your individual goals in mind. You have more than 4000 different mutual funds to choose from. You can also see all the data that can help you make the decision.
If the start seems a little complicated, you also have their ever-available customer service to guide you through the process. You just have to download the app to start on a life-changing path.
SIP or No SIP?
To make things simpler for young parents, we have something called a Systematic Investment Plan. This plan ensures that you don’t have to invest manually every single month. With an SIP, you can set up an amount of money that automatically is invested from your savings account. You can choose a date for monthly investment.
This system helps parents in getting into the discipline or habit of investing. This will make sure that your savings are increasing month over month and can make a real difference in your life.
Conclusion
As parents, we have a bunch of responsibilities like your children’s higher education that are upcoming. And they need funds and planning. This planning is what is made simpler and easier for your sake with the help of technology with an app like EduFund.
Investing comes with its risks but they’re minimized drastically when you’re investing for the long term. Be sure to do some research of your own to understand how mutual funds work. There are even other opportunities available to you.
Saving and investing right is going to level up your readiness. Moreover, it will help you get more out of your household savings. We encourage you to begin as early as possible. Why not be better prepared for the milestones when they come your way? Education planning on a budget? We got you covered!
Hope this article was informative and useful. Please leave your thoughts in the comments!
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