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Business News/ Money / Personal Finance/  How to achieve your financial goals with slow and steady investments?

How to achieve your financial goals with slow and steady investments?

Before you dream to settle down in a posh locality in South Mumbai, you must first plan your finances well in advance to help you earn the amount needed to first settle in that place.

Slow and steady wins the race and this is true for your investment journey too. (Pixabay)Premium
Slow and steady wins the race and this is true for your investment journey too. (Pixabay)

The recent advertisement on Twitter of a spacious Bandra-Worli sea link flat being put on sale for Rs 40 crores has again put the focus on the affordability of many people to buy such flats. Is it possible to earn and amass so much money in life? This is a common question that many ask, especially, those new in their financial journey.

First save, then invest

With so many investment products available, it can be difficult to decide what to start with. In India, the first choice of investment is mostly fixed deposits (FDs) or recurring deposits (RDs) in most cases. This helps because you must first think about setting aside an adequate emergency corpus before moving forward to work on the next step in your investment journey. Also, it is obvious that you must save enough that you may set aside before deciding on your next investment opportunity. Using borrowed funds with borrowed confidence forms the riskiest pairing. This could compel you to sell during the most unsuitable moment. Opting for your own conviction alongside your own funds is the recommended path.

How, where, and when to invest?

However, if your financial goals are steep like having enough to buy a Rs 40 crore flat, you must indeed be willing to take risks. One way can be to learn finance and then gradually invest in stocks. Though the volatility of the stock market can cause many to feel jittery, choosing stocks when they are significantly undervalued can help you hit a jackpot. However, you must know what to look at and what to avoid when looking for undervalued stocks with a long-term perspective. Take, for example, how Ashish Kacholiya and Nikhil Vora earned millions by recognizing microcap stocks before other investors realized these stocks for their true value. Obviously, Warren Buffett-like patience is something that you must cultivate with time.

Another way of building up capital slowly and steadily over time is through mutual funds. These investments are actually stocks bundled and grouped according to their market capitalization or sector or other factors. Some mutual funds also invest in government securities, money market instruments, gold, silver, or REITs/InvITs. And then there are passive mutual funds and exchange-traded funds (ETFs) too which mirror particular indices and yield returns sans any prejudiced view of any fund manager.

Dabbling in more risk for more returns

What do you understand about “risk"? Or rather, how much risk are you willing to bear? The risk of staying invested in the stock market and waiting for at least a decade to witness the magic of compounding than what you experience riding a Ferris wheel in a village fair. The riskiest investments are the small-cap and sectoral funds, though one must be willing to ride the occasional crests and troughs, which may also be prolonged owing to unforeseen macro factors.

The following table illustrates how simple investments done over a period, say 15-20 years can help you gain enough to pay a part of the flat’s cost while paying the remaining amount through home loans. Assuming that you step up your investments by 10 per cent every year, the returns from your investments can be considerably high.

Name of the fund 

Monthly Investment 

Return Rate

Investment Tenure

Invested Amount 

Estimated Value of Returns

Total Value of Returns 

Nippon India Small Cap Fund



20 years




DSP Small Cap Fund



20 years




Kotak Small Cap Fund



20 years




Invesco India Infrastructure Fund



20 years




Franklin Build India Fund



20 years




DSP Natural Resources and New Energy Fund - Direct Plan



20 years





Relying on gold investments

It may not always be possible to amass big sums and then invest in sovereign gold bonds (SGBs). Also, the Central Bank does not always announce the launch of these funds, which means that you may invest in them online. However, another way to invest continuously in gold and stay invested in it for a prolonged period can be by putting money in gold funds.

Opting for gold funds in India presents a favourable choice for investors seeking gold exposure without the concern of physically storing and upkeeping the precious metal. These funds, categorized as mutual funds, allocate their investments to gold bullions or gold-associated instruments. Consequently, investing in a gold fund translates to an indirect investment in gold itself.

Not that gold investments yield too high. However, during prolonged market downturns or adverse situations like wars resulting in economic depression and subsequent currency devaluation, gold investments can be the best option to fall back on.

CAGR Returns 

(in the 21st century)






Gold (in local currency)






Stocks (in local currency)






Stocks (in USD)






Credit: DSP Mutual Fund

Sahil Kapoor, Head of Products & Market Strategist, DSP Mutual Fund shared, “In the 21st century, Gold has beaten equity markets across most world markets. In USD terms, the performance difference is stark for countries where currencies have weakened or crashed. Gold has protected the purchasing power of investors."

Assuming that you invest Rs 10,000 every month in a gold fund that yields an average of 11 per cent returns every year. Stepping up your investments in gold by 10 per cent each year for the next 20 years would yield you a total return of nearly Rs 1,69,11,739.

Also, putting some money in gold through funds helps as gold qualifies as a non-correlated asset, signifying that its price movements diverge from those of other asset categories like stocks and bonds. This characteristic renders gold funds a beneficial avenue for portfolio diversification, effectively diminishing overall investment risk.

Adopting the traditional approach too

There are high-interest traditional deposits like high-interest bank and post office deposits or specialized schemes by banks and fintech organizations too that can help you amass a good corpus, albeit safely and without the effect of the continued tumult in the stock market. However, such investments need more time to help you reach your financial goals, which means that you must be willing to wait during the entire investment tenure.

Most importantly, you must be willing and ready to diversify your portfolio. When dealing with a modest investment sum, it becomes imperative to concentrate on a select number of commendable funds that align with your investment objectives and risk tolerance. This approach will enable you to optimize returns while curtailing potential risks. Gauge your comfort level with risk. As a novice investor, it's advisable to opt for funds exhibiting a lower risk profile. Most importantly, keep your financial goals in sight when drafting and finalizing your investment plan(s).


REIT offer exposure to real estate market without a lot of the hassles that usually come with it. 
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REIT offer exposure to real estate market without a lot of the hassles that usually come with it. 

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Published: 22 Aug 2023, 04:37 PM IST
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