Ritu is a simple girl from a middle-class family. She finished her MBA and has taken up a well-paying job. Her parents are proud of their daughter’s achievements and sensibility. Very recently, Anand’s family approached them, asking for Ritu’s hand for their son. Anand is a well-educated gentleman. Both the parties were more than happy and started preparations for the D-day.
One day, Ritu’s mother started a conversation about the jewelry she can buy for the wedding. Here is how the conversation went on.
Mom: We shall buy jewelry worth six lakh rupees for your wedding. This what we gave even to your sister on her wedding.
Ritu: But mom, what is didi (sister) doing with that jewelry. She hardly takes them out of the locker. From the very next day of the wedding, they were safely locked in the bank. Why not give me the money which I can actually use. May be in the form of FD or even mutual funds, which give better returns?
Mom: Dear, gold is an appreciating asset. You can use it whenever you want to raise loans and enjoy its higher value.
Ritu: Mommy, if I have to sell this gold to meet some financial requirement, can you guarantee that I will get a higher price than the rate for which it was bought? And, even if I use gold to raise a loan, what about those high-interest rates they charge?
Mom: You can at least raise a loan in a day against this gold right?
Ritu: To be practical, if I invest the same amount in debt funds, I can withdraw the amount in a day. The best part is that I need not have to pay any interest and the capital would have compounded till then.
Mom: Debt funds are risky, but gold is not!
Ritu: Debt funds are also low-risk instruments, moreover the value will compound, unlike gold. And, I don’t have to fear about my debt-funds being stolen when I am out of my home.
Mom: Beti, don’t you want to look beautiful on your big day? It’s your day!
Ritu: Mommy, beauty is in the heart not in the value of my trousseau. We don’t have to care about what others think, as long as we are comfortable and confident about ourselves. My money requirement will certainly grow with time so I would rather invest my money in best instruments. Not Gold!!
Convinced with her opinion, Ritu’s parents allowed her to go for the mutual fund investments. Now, her portfolio is going great with her investments getting compounded. Is it not a worthy gift to the loving daughter, from her parents on her wedding day?
