1. Just like he builds his "retirement corpus", a 25-year young regular earner can also build his "vacation corpus", by investing in a well-diversified equity fund, through monthly SIPs from his first salary itself.
2. A back-of-the-envelope calculation shows that he can annually 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 his annual vacations for the next 25 years (i.e. till age of 60) !
3. For instance, if he starts a monthly SIP of 4,000 in a 5-star Multicap fund for 10 years (i.e. 4.8 lakh invested in 25-35 age), he can start enjoying a 1-lakh vacation every year for next 25 years (during 35-60 age) - even after discontinuing further SIPs during this period - due to power of compounding !!
4. In fact, if he activates step-up SIPs with his annual salary increments, and / or opts for biennial vacations, he can build an even bigger "vacation corpus" for more enjoyable vacations !!!
2. A back-of-the-envelope calculation shows that he can annually 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 his annual vacations for the next 25 years (i.e. till age of 60) !
3. For instance, if he starts a monthly SIP of 4,000 in a 5-star Multicap fund for 10 years (i.e. 4.8 lakh invested in 25-35 age), he can start enjoying a 1-lakh vacation every year for next 25 years (during 35-60 age) - even after discontinuing further SIPs during this period - due to power of compounding !!
4. In fact, if he activates step-up SIPs with his annual salary increments, and / or opts for biennial vacations, he can build an even bigger "vacation corpus" for more enjoyable vacations !!!