MF Masters | Covid-19 is a reminder to start building your emergency corpus: Nippon Life’s Sundeep Sikka
A small amount of money invested regularly can create a huge emergency corpus for the future
Despite the belief that Covid 2.0 has come to settle, the overall economic situation remains worrisome. There has been a significant loss of income and the medical expenses have only risen. As a result, market liquidity has taken a hit. What are the lessons and how should you plan the way ahead?
“This pandemic is a strong reminder to plan for long-term emergency events well in advance. Small SIP investments must be kept secure as emergency reserves to help you fight such battles financially. If you haven’t done it yet, Covid-19 is the wake-up call you needed,” Sundeep Sikka, Executive Director and CEO at Nippon Life India Asset Management, told Money9.
Youngsters must understand the importance of investing for the future rather than spending on plain exuberance. If you spend a lakh on a mobile phone, remember that its value will only depreciate while putting the same money in an SIP or mutual funds can get your handsome, sometimes even extraordinary, returns in the long term.
“As a country, we still lack social security for the citizens. Therefore, we need to focus on savings. Cut down on holidays as of now and save the emergency in your emergency reserves. Investing Rs 10,000 per month in any small cap scheme can generate more than Rs 6 lakh at the end of five years,” Sikka said.
Small amount of money invested regularly can create a huge emergency corpus for the future. Problems like Covid-19 are inevitable and one cannot plan enough. However, securing your finances today can definitely ease up your future.
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