Buying a home is an ambitious goal that most millennials admit to having, and there’s no denying that it’s one worth focusing on. It helps you build your asset portfolio and also eliminates expenditure towards rent that is steadily increasing as the years go by. If your aspirations are similar, knowing how to finance your investment is half the battle won.
In order to better understand India’s millennials aspirations, wants, needs, and most importantly to understand how their financial decisions impact their aspirations, we conducted Aspiration Index Survey. The survey revealed that Indian millennials consider wealth to be a top priority, specifically buying a home. However, there’s an aspiration-readiness gap of 12 points as most people aren’t investing in a way that will help them make this purchase. They have a conservative view to investing and prefer insurance and fixed deposits over mutual funds. While these investments are low risk and provide fixed returns, the yield is low as well.
How Should You Invest To Become A Homeowner?
A shift in your investment approach is all it takes to become a homeowner. Considering you’re between the ages of 25 and 35 years, now is the best time to invest more aggressively and take calculated risks to create wealth that ties in with your goals. To buy a home as soon as possible, here are the options you should look at instead.
Systematic Investment Plan
This is the simplest way for you to invest to create wealth over a period of 5–7 years. By contributing a sum of money every month you can multiply your wealth significantly to finance your home. Besides, if you’re new to investing this is a great way to invest in market securities in a controlled manner. You can choose debt mutual funds as the underlying asset or Equity Linked Saving Schemes. Best of all, you can rest assured that your money is in safe hands as a fund manager invests it on your behalf. This makes SIPs a stress-free way to invest in the market as well.
Company Fixed Deposits
If you prefer having at least one instrument that gives assured returns, this fixed deposit variant is one worth considering. It offers a better rate of return than a bank fixed deposit It is also a good way to save for the home’s down payment, as well for costs such as stamp duty and registration charges that aren’t covered by a home loan. However, before investing in corporate fixed deposit, one should know that it offers better rate of return because the risks involved are higher. Whereas, fixed deposits is for risk averse investors with assured rate of returns. Also, while considering a corporate fixed deposit for investment, do check its credit rating along with return on investment (ROI).
So, if buying a home is on your mind, make sure your financial moves mirror this goal. Keep these options in mind to fast-track your purchase.
The writer is CEO, BankBazaar.
BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for credit card, personal loan, home loan, car loan, and insurance.