Plan for your holidays

A few friends met a few days back and one of them had just returned from an international holiday along with his family. As usual after mentioning how he enjoyed and where all they went, one of us asked him how big a hole was it on his pocket, he mentioned Rs. 3 Lakhs for 4 persons. Hearing this rest just said, we don’t think we could afford it or they would have to take a loan. That is when our friend told them he did not borrow nor was he a high earning individual, which all of us were aware of. So the next question was how, our friend just told them that he had been setting aside Rs. 8,000/- per month for the last 3 years and this amount grew to Rs. 3 Lakhs along with interest. This was a simple solution, which all of us can follow and still be debt free and both you and your family will be happy.

A break every year is a necessity, but a vacation is a luxury. Saving for a necessity is important, so do not borrow for a luxury. Setting aside money for a dream holiday should be done only after you have set aside money for your necessities. Also do not use your credit card for and during such trips, the foreign currency conversion costs are the most expensive ever. Always stick to the budget you have set aside. Your budget should include so unforeseen expenses as well. All said and done the travel bhoot cannot be stopped, what with so many advertisements and societal pressure. So if you must, then start by keeping aside some money every month and start researching from day one. As you have started researching, you would know most of what you require and costs early, so you could start planning early as well.

 

Doing your visa early would help you with getting good deals on your hotel and air bookings. You could also work on your foreign exchange requirements. Banks are not the best providers of exchange rates, so you could check out and get good deals on foreign exchange rates as well. Early bookings would easily help save around 10 to 20% of your costs. Last but not the least, where you keep your monthly savings, earning the best returns without losing on the capital, connect with your financial advisor before investing. Many travel firms comes with good schemes of saving for your holidays in association with banks, only hiccup is that your dates have to be fixed a year in advance. So do not fret, plan from your holidays in advance.

Is the timing right for Investment?

In the global markets, Gold had fallen some time back and it has now started to pick up again. Why is this happening? The only reason is uncertainty. As you must have seen, whenever there is uncertainty in the market, gold rises, this is the time to make money by selling gold. Worldwide all commodity prices are falling, we all want to know reasons, can’t you see, sales are not picking up, hence the prices are falling. All assets follow a cycle of 30 years, 10 years rise and 20 years fall. So are we in a rising or falling cycle for gold? You take a guess, gold prices just kept going up from 2002 to 2012 and then started falling, and so do you think history will repeat itself? Only time will tell. As regards equity market the cycle is for 7 to 9 years, 4 to 5 years of rise and 3 to 4 years of fall, looking at history where are we?

Real Estate also goes through cycles which is around 20 years i.e.10 years of rise followed by 10 years of stagnancy. Real Estate kept going up from 2004 to 2013, so now what? If you look at all the markets they are all supposed to be in fall mode and hence the uncertainty. Add to this interest rates are going to soften. So in such situation only thing that will go up would be rents, as people will not buy waiting for real estate prices to correct and interest rates to fall. But then you do not want to invest in real estate, so those who have already invested are bound to benefit during this time. So what should one do in such a situation? Depending on your investment horizon you can plan your investments. For short term go for Debt funds again here your choice of Liquid, short term and long term debt will depend on the period you are ready to wait. For medium term go for balanced funds and long term would definitely and always be Equity and that too using the SIP mode. For detailed investment plan or advice please contact your financial advisor.