FINANCE SPECIAL..INVEST TO REACH YOUR GOALS (2)

FINANCE SPECIAL..INVEST TO REACH YOUR GOALS

Short-term goals (6-18 months)

The stress should be on saving the required amount, not on getting higher returns.

Buying a car
Buying a car or upgrading to a bigger one is a negotiable goal. You can easily postpone it by 2-3 months if you are falling short. But this flexibility of need doesn’t mean you can put the money in a volatile equity-based instrument.
Where to invest: Start stashing money in an open-ended short-term debt fund. These funds are very liquid and you can withdraw anytime you need the money. They are also not very volatile and give returns comparable to fixed deposits.
Go on a holiday
This is a discretionary expense and the amount saved can be flexible. But it is not negotiable in terms of time. If you are planning to go for a holiday in June next year, you can’t push it to August just because you haven’t saved enough. Even so, you can take a bit of risk here.
Where to invest: Invest in fixed maturity plans (FMPs) of mutual funds with tenures that match your holiday plans. Fund houses are regularly coming out with FMPs. You can also opt for short-term debt funds.