How to use the festival bonus on mutual fund investments
How to use the festival bonus in mutual fund investment?
The holiday seasons mean joy, enjoyment, family reunions and celebrations. The bonuses during those moments add joy to the festive atmosphere. Although bonuses are money earned for work done throughout the year, many of us see it as extra money or disposable income. As a result, most of the bonus money is spent recklessly on useless expenses and extravagant gifts. Here are some smart ways through which investors can efficiently use bond money to improve their financial position and obtain long-term benefits.
Safety first: check your emergency funds:
The emergency fund is reserved contingency money, to help investors get ahead in case of any accident or accident, such as loss of work or loss in business. Normally, it consists of 4 to 6 months of monthly expenses. Investors who have not saved money for emergencies, now is the time to start. The bond will provide lump sum money that will help create this fund. Similarly, investors sometimes set up emergency funds and use the money for some expenses and forget to replenish the fund. Checking emergency balances and adding the right money to the fund will help investors during rainy days. This money can be parked in liquid funds or other low-income fixed-income funds.
Assign more money and reach financial goals faster:
When investors plan their financial objectives, they allocate a certain amount over a certain period of time to achieve the objective. Adding the bonus money to the existing portfolio can help investors realize their dream faster. Imagine that you have planned the car of your dreams after 5 years and now if you invest your bond correctly, you can pay it much sooner. Investors can achieve this by investing the global amount in mutual funds to create a larger corpus. Alternatively, depending on their risk profile, investors can also opt for the Systematic Transfer Plan or the systematic retirement plan in which they can deposit the bonus money into a less volatile fund, such as a liquid fund and systematically transfer money in a fund of greater volatility.
Advance tax planning can save investors from last-minute anxiety and stress at the end of the financial year. Investing the bonus amount in a savings scheme linked to equity helps to save taxes on the one hand and keep the regular salary for regular monthly expenses.
Buy gold on auspicious occasions:
Festivals are auspicious occasions to buy gold. However, buying physical gold carries additional costs such as storage and the cost of insurance. Investing in gold through gold ETF is a convenient way to own gold.
Knowing investment alternatives and planning intelligently can help investors enrich their financial position using bond money. Just like spending the entire amount of the bonus is not a good idea, sacrificing needs and saving the entire amount will not make you happy. Having an adequate balance of savings, investments and expenses will not only take care of holiday expenses and gifts for your family, but also take care of future financial needs.
Mutual fund investments are subject to market risks, read all documents related to the scheme carefully.