How To Build A Rs 7-Lakh Foreign Trip Corpus Through SIPs

A trip to an exotic foreign destination often comes at a hefty cost.  Many Indian travellers generally postpone their dream vacations due to a lack of money. Planning for your dream vacation should start with an assessment of financial aspects. Saving for a vacation is rare and many people often rely on credit cards and personal loans for their foreign trips. However, you can easily build a travel corpus through a Systematic Investment Plan (SIP).    

It may seem like an additional financial task to plan and save for your dream vacation, but you can conveniently build a sizable corpus with small investments. Consistency and financial discipline can help you build a travel fund over time. Mutual funds offer the flexibility of choosing the amount and tenure as per your need and through SIPs, you can invest small amounts every month.  

Instead of investing a large amount, you can build your travel corpus by saving a small amount every month through SIPs. Selection of the right mutual fund SIPs and consistency can help you conveniently accumulate a sizable fund for your next dream vacation or foreign trip.

If you are looking forward to building a travel corpus of Rs 7 lakh, here are a few simple ways to achieve your target for the dream foreign trip:  

·      Prepare your budget as per your travel plan, desired destination and itinerary.  

·      Now, it’s time to build your travel fund through a robust financial plan to accumulate the amount as per your estimated budget.   

·      Choose the SIP based on your investment horizon. For instance, you may consider debt funds for a short-term goal and equity SIPs for a long-term tenure.

·       Choose the SIP amount to reach your target of total travel budget based on the investment horizon and expected returns.

·       Once you choose the mutual fund schemes and SIPs, start investing through any mutual fund house or fintech platforms. Automating the SIP investments could be helpful in meeting your goal conveniently.

·      It’s also advisable to take into account the inflation and any contingency expenses while preparing your travel budget.

·      Keep a track of your investments and withdraw the amount before your foreign trip.

If you are looking forward to accumulating Rs 7 lakh for your next foreign trip, it can be easily achieved through SIPs. Let’s see how you can build a travel corpus of Rs 7 lakh through SIPs over a tenure of 3 years at an assumed interest rate of 12% per annum:  

Target: Rs 7 lakh

Investment Amount: Rs 16,500 per month

Expected Rate of Return: 12% per annum

Tenure: 3 years

Invested Amount: Rs 5,94,000

Estimated Returns: Rs 1,23,876

Total Value: Rs 7,17,876

As per the above calculation, you can easily build a travel corpus of Rs 7.17 lakh with an investment of Rs 16,500 per month over a three-year tenure. However, it’s important to note that mutual SIP returns are not guaranteed and market volatility could impact the actual gains.

With a proper investment plan, you can easily accumulate funds for your dream vacation without depleting your savings or relying on high-debt options like credit cards. Preparedness, financial discipline and constituent investment could be helpful in reaching your goal conveniently. You can also seek the guidance of a financial expert to prepare a robust plan as per your investment horizon, risk appetite and the amount you want to invest.