How should a person invest to travel a lot?

by - 3/26/2021

 'A person who has not travelled the world has only read the cover of the book' said Father Augustine. We all love to travel. Don't we? Travelling is the most popular hobby one would come across. However unlike other hobbies, travel is an expensive passion. But it is also true that travelling is the only investment that makes you richer. Having said that, one needs money to travel; whether it is luxury or budget. The key to easily fulfilling this passion lies in smart savings, which I am going to elaborate below.

We started a separate budget for our world travels ever since we decided to globe trot once a year at least. Saving carefully is the key; whether you plan to travel domestic or international. Having explored 23 countries and almost entire India till date, here I am sharing my smart investment tips with you all so that the budget never becomes a burden.

1. Normal Savings: You can decide a small, specific budget to be set aside every month. It can be as low as 500INR per month which will yield 6000 INR at the end of the year and hence 30,000 INR after 5 years, which can be used for a nice domestic trip. Easy plan but not too viable if you plan to travel frequently. You can cut down on 'unnecessary' expenditures on clothes and fancy coffees for travels.

2. Recurring Deposit: Again you set aside a fixed amount every month for your sojourns. The benefit here is that you get to reap the interest. You can also start separate recurring deposits for different members of the family who wish to travel. The end result is substantial depending on your savings and requirements.

3Mutual Funds: This is an excellent way to invest for travelling and one reaps humungous benefits. 

Mutual fund can be explained as a pool of fund that comprises of many investors who put in small deposits of their earnings which are in turn invested in securities like bonds, stocks etc.

SIP or Systematic Investment Plans: SIP is an easy way to achieve life's goals; whether it's planning your child's education or saving for that exotic vacation, building your dream home or plan your retirement.

Depending on what your financial goal is, you can calculate your monthly SIP amount investment.


The power of saving works better when investment is done at an early age.

Now one may think why not opt for EMI instead of investing in  SIP?

In EMI you pay interest while in SIP, you earn interest. So if you plan that holiday earlier, you not only earn through interest but also get good deals on airfares and accommodation; as well as extra time to research and plan for that dream vacation of yours.

Benefits of investing in SIP:

SIP is an investment that can be made by people of all ages. The duration, fund options and amount may vary from one age group to the other but investors of all age groups can enter and gain from SIPs.

SIPs provide you with liquidity i.e you can have access to all or part of your invested funds as and when required. This means that there is no lock-in period i.e no minimum specified period for which you compulsorily have to keep your money invested.
In simple words, SIP:

It leverages the power of saving.
Rupee cost averaging
It is convenient.
It is disciplined investing.
Helps you through market volatility.


Gives you a long term advantage.

An SIP investment can help you save from as little as Rs.500 each month, and it can help you to accumulate an sizable amount over time to reach your goals.

Those looking for investing in Mutual Funds can opt for these types of MF depending how soon you want to go for a vacation.

a. Short Term Fund: These type of funds are ideal if you want to get returns within a year. They generate returns of around 7% per annum. This fund aims for consistency, stability and liquidity by keeping the duration and credit risk low. The Macaulay duration of the portfolio is between 3 to 6 months.

The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price.

For the uninitiated, Liquidity means how quickly you can get your hands on your cash.

The objective of this fund is to generate reasonable and stable income and provide liquidity to the unit holder.

So if you are looking for an annual exotic vacation, this may help you.

b. Low Duration FundThe Macaulay duration of the portfolio is between 3 to 6 months. So you can opt for this for a biannual vacation.

The objective is to generate reasonable returns primarily through investments in fixed income securities and money market instruments. 

c. Balanced Advantage FundThese mutual funds offer annualized returns of up to 9% for a time horizon of three years and have relatively lower risk involved. So it is ideal if you are planning for a grand vacation for a special occasion. 





Having summing up everything in a nutshell, people are quite skeptical about mutual funds because of some common myths lurking around. Let me bust some of them for you:

Myths about mutual funds:

1.You need to invest a lot of money. False. You can start as low as 500INR. SIP or Systematic investments plans are the best!

2. Top rated mutual funds are the best. False. Mutual funds are subject to market fluctuations. So if an MF has done well before does not necessarily mean it would do great again. You need to do your research before investing.

3. You need to be an expert to invest. False. You can start at any age. In fact investing at a younger age is more beneficial in the long run because of the longer duration.

You can refer to the Mutual Fund Dictionary to clarify your doubts regarding all the technical terms related to investment.

Always have the habit of reading the scheme related documents before investing to understand the scheme type, investment patterns and the risk factors associated with particular investments and consult your financial advisor to understand the implication of any investment.

I hope I have helped you to some extent in guiding how to invest to travel more. You can head to L&T Mutual Fund for detailed information on investment in mutual funds.

How do you invest and save for exotic travels? Let me know in the comments below!


Disclaimer: This information is for general information only and does not have regard to the particular needs of any specific person who may receive this information. L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates; does not guarantee/indicate any returns/and shall not be held liable for any loss, expenses, charges incurred by the recipient. The recipient should consult their legal, tax, and financial advisers before investing. The recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved. 


Mutual Fund investments are subject to market risks, read all scheme related documents carefully.





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11 comments

  1. I definitely have to look my options of SIP and mutual funds. I do know about the recurring and fixed deposits but I have never invested in SIP. And yes I agree that it is important to keep funds aside for traveling.

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  2. Investing in SIPs wSs one of my best decisions. Your post is an eye-opener for people looking to invest to travel around.

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  3. Thanks for sharing this useful and informative post. I am planning to invest in SIP as well as in IPOs.

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  4. That’s some informative post. I am planning since long to invest in mutual funds but we’re reluctant. Will check SIP & decide soon.

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  5. This really a great tip to plan and travel . My hubby invest in mutual fund and I will share details about SIP to him. So we can plan next trip soon.

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  6. SIPs sound like a great investment. This indeed makes travel more achievable

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  7. I have never invested in mutual funds but I'd now invest to travel more. Thanks for your useful post.

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  8. Every bit of information is right, savings in Mutual funds is one of the best decisions i think i made on investment side. Traditional form of investments can never yield good results in long run.

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  9. Sip sounds like an effective way of saving. I have not opted for it till now but should definitely have to.

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  10. Vacations are best enjoyed when well planned and budgeted. Investing in mutual funds is the best way to start saving for a good holiday.

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  11. I've just finished one trip this year. This list is definitely going up my agenda on planning my next trip. About time I plan my travel budget and give myself a luxurious outing post the lockdown.

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