Greetings for the Day!
With the festival of lights just around the corner, you can experience the beginning of vibrant atmosphere and joyful spirit of celebration. Along with this happiness, the festivities of Diwali also bring in the much anticipated Diwali bonus for most of the employed people. Some of us already have a planned use for this bonus, while some of us don’t. We at RichVik Wealth want to help you make the best use of this bonus money.
Any money that is received by us can be used in the following 3 ways:
1. Consumption: Buying any goods or services for our utilization. For example purchase of a mobile phone, TV, etc.
2. Savings: Keeping the money in the form of Cash or in our Savings Bank account for any immediate utilization.
3. Investment: Investing the money across various asset class like Gold, Equity, FD, etc.
Neither of the three is the only absolute way of utilization of funds. It is the right combination of the three that can give us the maximum joy, satisfaction as well as benefit.
Let us consider various scenarios to understand this:
1. ABC received a bonus of ₹55,000. ABC wanted to purchase an iPhone since a long time but couldn’t accumulate enough funds. ABC found that iPhone 14 is available during Diwali for ₹60,999 and so he/she immediately decided to buy the iPhone using the bonus funds.
In this scenario, since ABC had a goal of purchasing an iPhone and the bonus funds were used towards achieving a goal, it may be said that bonus funds were used to satisfy a consumption requirement and hence used optimally.
2. ABC received a bonus of ₹55,000. ABC did not particularly have any goal in mind for utilizing this bonus funds. He/She allowed this bonus money to accumulate in Savings Bank account.
In this scenario, since ABC did not particularly have any planned consumption expenditure nor did he/she require the funds to be kept in for emergency. ABC could have invested the bonus money and earned interest/returns on the same and utilized the same after some years towards any of his/her future goals.
3. ABC received a bonus of ₹55,000. ABC did not particularly have any goal in mind for utilizing this bonus funds. So, ABC decided to invest this funds. ABC invested the funds in Equity mutual funds since he/she did not expect these funds to be required anytime within 5 years.
In this scenario, since ABC did not particularly have any planned consumption expenditure nor did he/she require the funds to be kept in for emergency, so ABC invested the bonus money.
Within this investment scenario, let us consider three further scenarios to understand more about option of investing our Bonus:
As we can see that, in all the three scenarios, there is substantial benefit of investing the amount for a longer duration.
For person who is up to age of 35, can invest his/her bonus every year from now on with a 5 % step up (Assuming a 5% growth in bonus amount every year) for 25 years, can generate a corpus of Rs.1.38 crores by the end of 25 years. This means a person can cover a part of his/her retirement funds, simply by investing the bonus amount every year. Even for someone who is able to invest his/her bonus just this year, also can accumulate a good amount of funds for his/her retirement by the end of 25th year.
For someone who might be above 35 years, can still invest the bonus amount for retirement fund or for the time horizon based on some of his/her other life goals like Children education goal, Marriage goal, Vacation goal, etc. and make the best use of the bonus money.
Thus, as we understand from the above, Diwali bonus may be used based on personal goals. And in case where there is no planned consumption expenditure, the same can be invested and used for maximizing wealth.
We at RichVik Wealth, have a structured product – ‘Bonus Bonanza’ whereby we recommend the individual to invest their yearly salary bonus directly into best investment avenues. We believe that this extra income if invested diligently every year for a time horizon of 20-25 years can result in a substantial corpus which can be a sizeable fund and help the person take important financial decisions later in life including a retirement fund as well.
To know more about the product, you can visit – https://richvikwealth.in/bonus-bonanza-become-a-crorepati-with-your-bonus/
To understand more on the topic as well as to start investments please feel free to contact us: