A world trip can be a relaxing and rewarding experience; however, it is also an expensive endeavour. To take an enjoyable holiday without worrying about the cost, it is important to begin investing accordingly.
A world trip is sure to be an experience to cherish, but does require a significant amount of money. Today, an average world trip can cost approximately Rs.15 lakh. Rather than saving up, if you make smart investments, you can finance your world tour in five years or less. Some of the rewarding investment options in this category are mutual funds, equity linked saving scheme, gold exchange traded funds, national pension scheme, and company fixed deposits. A combination of these options can easily help you accumulate enough funds to go for an exciting world trip.
Here are the investment options in detail with expected returns to fund your world tour:
- Company FDs:
- This option provides a high amount of stability for the invested amount.
- It allows you the freedom to choose between cumulative and non-cumulative FDs, depending on your requirements.
- Cumulative FDs provide you interest at end of the tenor, while non-cumulative FDs provide interest on a monthly, quarterly, half-yearly, or annual basis.
- Anytime use FD Calculator to calculate your maturity amount.
Read more about the difference between Cumulative & Non-Cumulative FDs here https://blog.bajajfinserv.in/cumulative-fd-and-non-cumulative-fd/
- In this option, you can receive an interest rate between 7% to 8% annually.
- FD (Fixed Deposits) are an integral part of any investor’s portfolio, especially if you do not like taking risks.
- Investing a part of your savings into FDs can go a long way in saving enough money for a world trip five years down the line.
- National Pension System (NPS):
- NPS offers a greater choice over allocation of savings, as compared to most other 5-year investment options.
- It provides an average annual nominal return of up to 11%.
- NPS has an administrative structure that is investor friendly. Technological changes are put in effect faster in the National Pension Scheme.
- NPS offers a lot of flexibility during retirement. You are allowed to postpone withdrawal of the lump sum amount up to 10 years.
- It contains a mandatory annuity component that provides more protection against long-term risk.
- The generous 11% returns make NPS one of the most lucrative investment options if you are considering a world trip after five years.
- Gold Exchange Traded Funds (ETFs):
- Gold ETFs are open-ended mutual funds that provide quick and convenient dealing through a demat account.
- They feature transparent pricing and are taxed like mutual funds, with no deductions under Section 80C.
- They offer an annual rate of return up to 7%.
- Gold ETFs provide high liquidity, no storage and security issues, and lower volatility as compared to equities.
- Gold ETF is a passive investment; when gold prices increase, the value of the ETF increases, and when gold prices decrease, the ETF loses its value accordingly.
- Combining your Gold ETF investment with fixed deposits is a good way to assure stable returns, and make your world trip a certainty.
- Equity Linked Savings Scheme (ELSS):
- ELSS offers tax-saving mutual funds.
- 5-year returns from ELSS can go up to 13%.
- It has a 3-year lock-in period.
- You can save income up to Rs.1.5 lakh under Section 80C by investing in ELSS.
- ELSS funds are divided into growth and dividend plan options. The growth option is advisable for long term investments like planning a world trip, as it provides higher returns.
Learn more about investing in equity-linked savings schemes https://blog.bajajfinserv.in/your-guide-to-investing-in-equity-linked-savings-schemes/
- Balanced Mutual funds:
- This option involves investing money in market securities issued by organisations to raise money for certain purposes.
- The rates of return in this option range from 8-9%.
- This option allows you to invest in a diverse range of funds like gold mutual funds, diversified mutual funds and more.
- This option is, however, heavily under the influence of market forces, so the returns are not safe and guaranteed.
- This option offers you a high level of liquidity. You can instantly sell securities to raise cash.
You can choose any one or even a combination of these options. The ideal portfolio to facilitate a world trip would be to select a mix of high risk and low risk options. As your first step towards saving enough for a world trip, try investing in simple FDs.