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Lack of Money Shouldn’t Stop You From Achieving Your Long Term Goals

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We often come across people saying:

\”I want to go to Europe/Switzerland for a vacation.\’\’

 \”I want to buy luxury car.\”

\”I want to buy my own house.\”

Can you guess what\’s common among the above statements? The answer is desire. And what is stopping people from achieving these desires is the lack of money. We all have desires, and the list is endless.

Let\’s take a look at some financial goals where lack of money is often the biggest hurdle:

Buying your dream house

Have you been thinking of buying your own home? A bungalow with a garden or an apartment with facilities like a clubhouse and a swimming pool? But practically are you finding it difficult to afford even a one-bedroom house in your town? Forget private villas or an apartment overlooking the sea, even a one-bedroom house in major cities costs a lot. The idea of a dream home may vary from person to person, but money is the common deciding factor.

Property prices have increased manifold in the last few years and not showing any signs of coming down. Buying your dream home can be a costly affair as banks do not lend more than 75-85% of the value of the property, and you have to make a lump sum down payment. A major portion of your life savings will be used up to make this payment and secure the home loan.

Saving for your child’s future

Dreaming of sending your child abroad for higher education? That\’s an excellent thought. However, it will cost you a lot, though. A 2 year MBA course in a top international university will cost you approximately 1.01 crores today. Forget foreign education, an MBA course in a prestigious college in India itself would cost you around 10 to 20 lacs. It estimated with the current scenario that the average cost of an MBA degree would be about 50-60 lacs by the year 2035. The cost of an engineering degree is expected to touch approximately 25-30 lacs by the year 2035.

Saving for a happy retirement

Retirement is a time to enjoy life without worrying about money. It is the time when you can take up your hobbies or follow your passions. When you retire, your daily commute to work stops, and so does your income. To have a comfortable life post-retirement, one needs to start saving early and regularly.

Can you compromise on any of these long term goals? The answer is simply no.

Setting financial goals gives you long-term vision and motivation. It is equally important to have a plan to achieve your financial goals. The common factors among all the above purposes is long-time period and the requirement for a considerable corpus fund. It is virtually impossible to accumulate such a huge corpus fund by investing in traditional instruments. Short term goals like buying a car or an exotic vacation can either postponed or avoided altogether, whereas long term goals are entirely unavoidable. 

Equity investment is the best way to achieve your long term financial goals

Fixed income investments, such as fixed deposits, post office deposits, savings certificates etc. offer marginal returns ranging between 6-7% yearly, as per current interest rates and lack the power to increase your wealth or beat inflation. On the other hand, when you invest in stocks, you are investing in the growth of a company. So, over a more extended period, your money will also grow along with the company and deliver returns which can easily beat inflation.Read more about growth and value investing here.

The biggest secret of wealth creation is investing regularly in good quality stocks of well-managed companies with sound business fundamentals. Such stocks are safe from temporary ups and downs in the stock market and will always deliver handsome returns to investors in the long term.Know more about factors to look while choosing quality stocks here.

A wish without an action plan is simply a wish.  One can either keep complaining about the lack of money or take a positive step towards wealth creation by investing in equity. And believe it or not, the best time is now.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

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