You have landed that dream job. Finally you have some significant savings and
you are in the market for a brand new car. You think your budget would be in
the range of five to six lakhs. You are now contemplating taking a loan. You
survey the landscape and find auto loan rates ranging anywhere from twelve to
fifteen percent. You are disheartened a bit as the loan rates appear a bit
expensive. You would have to shell out quite a bit in interest expense over the
life time of the loan.
This however should come as no surprise to you as auto loan
rates have been exhibiting a rising trend over the last five to ten years. All
is not lost though; If you can postpone your purchase for a little while and
develop a systematic investment strategy in top rated mutual
funds you may be able to save enough for your car and also save significant
interest expense that a car loan would entail.
For example if you are about thirty years old and you have a
medium risk appetite implying you invest about 60% in equity and 40% in debt
mutual funds you could achieve your targeted goal of Rs five lakhs in about 5 years
if you invest as little as Rs 5,000 a month. Your monthly investment would be
diversified into top rated mutual
funds from highly rated fund houses like Birla Sun Life, SBI, ICICI
Prudential and Franklin Templeton. If you double your investment amount to Rs 10,000
a month then you accomplish your investment goal a lot faster.
If you have a slightly higher risk appetite and are willing
to invest about 80% in equity and 20% in debt you can potentially accomplish
your investment target a lot faster than the earlier approach with proven
investments in top rated mutual funds investing as little as Rs 5,000 a month.
Double that investment and your dream car is just a few years away. So why
wait? Custom make your own unique
investment strategy to make that dream car a reality.
