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Smart money-moves for our mothers: Rahul Jain

A prudent way to kick-start equity investment is through systematic investment plan (SIP) in mutual funds. Here, a fixed amount is deducted and invested in the chosen fund at a pre-defined interval.

May 09, 2021 / 08:08 AM IST
Our mothers often ignore their retirement goals while taking care of everyone around them.

Our mothers often ignore their retirement goals while taking care of everyone around them.

They say that there is no bigger gift than the gift of knowledge, and who better to learn this from than our very first teachers in life - our mothers. A mother plays a very important role in the journey of each individual. They help to balance out different aspects of our life whether be physical, mental, psychological or financial well-being. And mother's day is simply one way of expressing gratitude for all that we receive over the years.

While we can never repay the contribution of our mothers, we can definitely try and ensure that their financial well-being is taken care of. With the occasion of Mother's Day just around the corner, the one gift that we need to give our mothers is the power and knowledge to invest.

Let us look at a few ways we can financially empower our mothers in the best way possible.

Staggered Investments in Equities

Ask your mother to take cognizance of her financial priorities and take a calibrated approach in building equity investment. Among the several asset classes, equities have the potential to deliver inflation-beating returns in the long run. What it means is that equities offer real returns, up and above inflation.

Close

A prudent way to kick-start equity investment is through systematic investment plan (SIP) in mutual funds. Here, a fixed amount is deducted and invested in the chosen fund at a pre-defined interval. It imbibes a disciplined savings habit and helps you build wealth in a sustained manner. You can start an SIP from as little as Rs 500 per month and increase it later with a rise in income.

An SIP of Rs 1,000 per month offering annualised returns of 12 percent in a fund for 10 years can help you garner a corpus of nearly Rs 2.3 lakhs.

Build an Emergency Corpus

While financial advisors have always advocated the need to have an emergency fund, and the past few months have proved how essential this corpus is. While our mothers are known to make and keep small savings aside, it is important that such corpus helps them to sail through a crisis or meet any crucial commitments.

An emergency corpus will help you to meet day-to-day expenses and also address essential commitments. With COVID-19 impacting almost each and every household, it has become equally important to park a sum of around 60 K to 1 lac for a family of four. This can help take care of any emergency tests or medicine requirements.

Park money in liquid funds or bank fixed deposits to build this all-important corpus.

In conclusion

Our mothers often ignore their retirement goals while taking care of everyone around them. Encourage her to consider her retirement planning with all seriousness. Plan for this all-essential goals and start investing in instruments such as the National Pension System (NPS) to build a sizable retirement corpus, so that she may be able to live her golden years stress-free.

Disclaimer: The views and investment tips expressed by the investment experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Rahul Jain is the EVP at Edelweiss Wealth Management.
first published: May 9, 2021 08:08 am

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