1. Just like his "retirement corpus", a 25-year regular earner should build his "vacation corpus" through SIPs in a well-diversified equity fund from his first salary itself.
2. A back-of-the-envelope calculation shows that he can easily withdraw 25 times of his monthly SIP amount after 10 years of investment in his "vacation corpus" (i.e. from age of 35), for enjoying debt-free vacations every year for the next 25 years (i.e. till age of 60) !
3. For instance, if he starts investing 4,000 in monthly SIPs of a 5-star Multicap fund for 10 years (4.8 lakh invested in 25-35 age), he can start availing a 1-lakh vacation every year for next 25 years (in 35-60 age) - even without continuing any SIP during this period - due to power of compounding !!
4. If he takes biennial vacations and/or links his annual increments with step-up SIPs, he can make this corpus even more fruitful and his vacations more enjoyable !!!
2. A back-of-the-envelope calculation shows that he can easily withdraw 25 times of his monthly SIP amount after 10 years of investment in his "vacation corpus" (i.e. from age of 35), for enjoying debt-free vacations every year for the next 25 years (i.e. till age of 60) !
3. For instance, if he starts investing 4,000 in monthly SIPs of a 5-star Multicap fund for 10 years (4.8 lakh invested in 25-35 age), he can start availing a 1-lakh vacation every year for next 25 years (in 35-60 age) - even without continuing any SIP during this period - due to power of compounding !!
4. If he takes biennial vacations and/or links his annual increments with step-up SIPs, he can make this corpus even more fruitful and his vacations more enjoyable !!!