In the last few years, marriage festivities and the expenses associated with it have ballooned. While in the past marriage hall, food and gold were the three major expenses, today pre-wedding photography, elaborate sangeet and themed weddings increase the overall cost. This makes wedding planning an important goal for investors.
We spoke to a few advisors to understand how they have helped their clients plan for their children’s wedding.
Kapil Holkar, Bhopal
In 2009, a client approached Kapil for advice on planning for his daughter’s wedding. As the client was a salaried individual, he was worried about accumulating sufficient funds for his daughter’s education and wedding.
Kapil advised the client to start SIP of Rs. 10,000 and increase it gradually in line with the increase in his income. He invested the money in two funds - mid cap and multicap as the investment horizon was 10 years. He also educated the client on equity market risks and benefits of long term investing to ensure that the client did not redeem his investments prematurely in case of volatility.
Kapil also took a less traditional approach, he advised his client not to invest in gold ETF. Instead, he recommended another SIP of Rs. 5,000 (over and above the Rs. 15,000 SIP) in multicap fund for eight years. Kapil had the firm conviction that equity funds would outperform gold by a wide margin over 10 years.
Overall, due to Kapil’s investment advice and the client’s disciplined investing, the client accumulated Rs. 42 lakh by early 2019. Recently, the client arranged a grand wedding for his daughter. Kapil was a special guest at the function.
Ram Shah, Finedge Services, Guwahati
In 2014, Ram acquired a client who was on the verge of retirement. His son was planning to get married in the next two years.
Since the client’s son wanted a destination wedding in India, Ram advised him to set aside Rs. 40 lakh for the wedding. As the goal was near, Ram predominantly invested the money in low risk debt funds. The balance was invested in gold ETFs. Instead of holding physical gold, Ram advised the client to redeem the gold investment at the time of marriage and use the money to make ornaments.
When the client came to Ram in 2016 with his son’s wedding invite, he thanked Ram for effectively rebalancing his portfolio such that he could easily manage all the wedding expenses without a worry.
