From dreaming to achieving: How smart investing transforms aspirations into accomplishments

The Importance of Financial Planning

In today’s fast-paced world, financial planning is crucial for anyone who wishes to lead a prosperous life. While social media influencers often spread fear with their financial advice, it’s important to focus on practical and reliable methods. Unlike our parents, most of us won’t benefit from pensions. This means that not only do we need to plan for our working years, but we also must consider our retirement. Smart investing is the key to ensuring a stable and secure future.

The investment landscape has come a long way. In the past, people saved money at home, often stashing cash in hidden corners. With the advent of banks, saving money became more structured and secure. Fixed Deposits (FDs) and Recurring Deposits (RDs) offered a safe and relatively profitable way to save. Today, mutual funds and stocks are gaining traction, offering higher returns and more dynamic investment opportunities.

Special Focus: Stree Dhan

In Indian households, a unique form of savings known as “Stree Dhan” has been practiced for generations. Housewives often save money from the household expenditure given by their spouses. This money is meticulously saved and invested in gold, fixed deposits, or other small savings schemes, creating a financial safety net for the family.

The Most Commonly Used Investment Instruments

1. Mutual Funds

Why Popular: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. They are managed by professional fund managers, making them accessible to investors without in-depth market knowledge.

• Diversification: Reduces risk by spreading investments across various assets.

• Professional Management: Experts manage the funds, making informed decisions.

• Variety: Offers options like equity, debt, and hybrid funds to suit different risk appetites.

2. Stocks

Why Popular: Investing in stocks involves buying shares of companies, providing potential for high returns as the company grows and profits.

• High Returns: Historically, stocks have provided higher returns compared to other investments.

• Ownership: Offers partial ownership in companies and voting rights on key issues.

• Liquidity: Stocks can be easily bought and sold on the stock exchange.

3. Fixed Deposits (FDs)

Why Popular: FDs are investment instruments offered by banks and NBFCs where you deposit a lump sum for a fixed tenure at a predetermined interest rate.

• Safety: Low risk as they are not affected by market fluctuations.

• Guaranteed Returns: Interest rates are fixed, providing assured returns.

• Flexibility: Offers varying tenures and interest payout options.

4. Public Provident Fund (PPF)

Why Popular: PPF is a government-backed savings scheme with a fixed interest rate, providing tax benefits under Section 80C of the Income Tax Act.

• Tax Benefits: Contributions, interest earned, and maturity amount are tax-exempt.

• Safety: Backed by the government, making it a very safe investment.

• Long-Term Savings: Encourages long-term financial planning with a 15-year lock-in period.

5. Real Estate

Why Popular: Investing in property can provide rental income and potential capital appreciation.

• Tangible Asset: Physical ownership of property.

• Appreciation Potential: Property values typically increase over time.

• Rental Income: Provides a regular income stream.

6. Recurring Deposits (RDs)

Why Popular: RDs allow investors to deposit a fixed amount every month for a predetermined period, earning a fixed interest rate.

• Disciplined Savings: Encourages regular savings habits.

• Fixed Returns: Interest rates are predetermined, ensuring guaranteed returns.

• Low Risk: Similar to FDs, they are safe and not subject to market risks.

7. Gold

Why Popular: Gold has been a popular investment for centuries due to its ability to retain value over time.

• Inflation Hedge: Tends to maintain value and even appreciate during inflation.

• Liquidity: Can be easily bought and sold.

• Cultural Significance: Particularly in India, gold is also considered a symbol of wealth and security.

8. Bonds

Why Popular: Bonds are debt instruments where you lend money to an entity (corporate or government) that borrows the funds for a defined period at a fixed interest rate.

• Stable Returns: Provide fixed interest payments.

• Lower Risk: Generally considered safer than stocks.

• Diverse Options: Include government bonds, corporate bonds, and municipal bonds.

9. Digital Gold

Why Popular: Digital gold allows you to invest in gold without physical possession, providing the convenience of online transactions.

• Accessibility: Easy to buy and sell online.

• Safety: Eliminates the risks associated with storing physical gold.

• Small Investments: Allows you to start with small amounts.

Introducing Multipl and the Concept of Spendvesting

Multipl is a fintech firm revolutionizing the way people save and invest. The concept of spendvesting introduced by Multipl is based on the idea that everyone aspires to maintain a smart and savvy lifestyle. Spendvesting means investing now to spend tomorrow. Here’s how it works:

1. Goal Creation: Users can create either long-term or short-term goals.

2. Daily Investments: Investments can start as small as ₹33 per day.

3. Optimized Returns: Multipl invests on your behalf in mutual funds to maximize returns. If a certain portfolio isn’t performing well, Multipl’s team can switch funds to ensure market returns.

4. Additional Savings: In addition to returns from investments, users get brand vouchers, further boosting their savings. For instance, if you invest ₹1000 at a 12% interest rate, you get ₹1120 plus 5-10% in brand vouchers, effectively increasing your overall returns to around 15-20%.

5. Digital Gold Investment: Multipl has also started offering digital gold investments, adding another layer to its investment options.

Advancements in Investment Options

The current investment scenario is diverse, offering a range of options tailored to different risk appetites and financial goals. Here’s a look at the evolution:

• Traditional Savings: At home savings and gold.

• Bank Savings: Savings accounts, Fixed Deposits (FDs), and Recurring Deposits (RDs).

• Modern Investments: Mutual funds, stocks, and now digital gold through platforms like Multipl.

Data Points and Trends

According to a report by the Association of Mutual Funds in India (AMFI), the mutual fund industry in India has grown at a Compound Annual Growth Rate (CAGR) of 20% over the last decade. This indicates a shift towards more sophisticated investment methods among Indian investors.

Common Aspirations of the Current Generation

The aspirations of today’s generation are diverse and dynamic. Smart investing can help achieve these goals without financial strain. Here are twelve common aspirations and how investments can help achieve them:

1. Buying a House:

   • Average Amount: ₹80 lakhs to ₹2 crore

   • Investment Instruments: Mutual funds, Public Provident Fund (PPF), and National Savings Certificate (NSC)

   • Multipl Goal: Long-term goal with monthly SIPs ranging from 10 to 30 years.

2. Higher Education:

   • Average Amount: ₹10 lakhs to ₹50 lakhs

   • Investment Instruments: Education savings plans, mutual funds, and Fixed Deposits (FDs)

   • Multipl Goal: Medium-term goal with monthly SIPs ranging from 2 to 20 years.

3. Retirement Planning:

   • Average Amount: ₹1 crore to ₹5 crores

   • Investment Instruments: National Pension System (NPS), mutual funds, and stocks

   • Multipl Goal: Long-term goal with monthly SIPs ranging from 10 to 30 years.

4. Travel and Vacations:

   • Average Amount: ₹1 lakh to ₹5 lakhs

   • Investment Instruments: Short-term mutual funds and savings accounts

   • Multipl Goal: Short-term goal with daily investments starting at ₹100 or Mutual Fund investments with a tagged brand to get additional savings

5. Wedding Expenses:

   • Average Amount: ₹5 lakhs to ₹20 lakhs

   • Investment Instruments: Mutual funds and savings accounts

   • Multipl Goal: Medium-term goal with daily investments starting at ₹300 if you are looking at saving for shopping else, go for monthly SIPs

6. Emergency Fund:

   • Average Amount: 3-6 months of living expenses

   • Investment Instruments: Savings accounts and liquid mutual funds

   • Multipl Goal: Short-term goal with monthly investments for the amount you’d want to save

7. Children’s Education:

   • Average Amount: ₹5 lakhs to ₹20 lakhs

   • Investment Instruments: Child education plans and mutual funds

   • Multipl Goal: Long-term goal with monthly investments ranging from 1 year to 5 years or however you want to plan

8. Buying a Car:

   • Average Amount: ₹5 lakhs to ₹20 lakhs

   • Investment Instruments: Fixed Deposits (FDs) and savings accounts

   • Multipl Goal: Medium-term goal with monthly investments for the kind of amount you’d want to save in the said time frame.

9. Home Renovation:

   • Average Amount: ₹2 lakhs to ₹10 lakhs

   • Investment Instruments: Personal loans and mutual funds

   • Multipl Goal: Medium-term goal with monthly investments for the kind of amount you’d want to save in the said time frame.

10. Starting a Business:

    • Average Amount: ₹10 lakhs to ₹50 lakhs

    • Investment Instruments: Mutual funds and stocks

    • Multipl Goal: Long-term goal with monthly investments for the kind of amount you’d want to save in the said time frame.

11. Health and Fitness:

    • Average Amount: ₹1 lakh to ₹5 lakhs

    • Investment Instruments: Savings accounts and mutual funds

    • Multipl Goal: Short-term goal with monthly investments for the kind of amount you’d want to save in the said time frame.

12. Gadget Upgrades:

    • Average Amount: ₹50,000 to ₹2 lakhs

    • Investment Instruments: Savings accounts and short-term mutual funds

    • Multipl Goal: Short-term goal with daily investments starting at ₹33 or Mutual Fund investments with a tagged brand to get additional savings

Summary Table

Conclusion

In conclusion, financial planning and smart investing are essential for transforming dreams into reality. The investment landscape has evolved, offering a wide range of options to cater to different financial goals. Platforms like Multipl simplify the process of saving and investing, making it easier to achieve your aspirations. Whether it’s buying a house, planning for retirement, or taking a dream vacation, smart investing ensures you can accomplish your goals without financial stress. Embrace the concept of spendvesting and secure your future today.