The Two Fathers of Panaji
My dear friend, come, sit. Let me tell you a story about two fathers from our very own Panaji. Both loved their children deeply. Both dreamed of a bright future for them. But their journeys to secure that future... were as different as the Mandovi river is from the Arabian sea.
The Safe Harbour of Fixed Deposits
Mr. Joshi was a careful man. For him, safety was everything. The moment his daughter, Anjali, was born, he opened a Fixed Deposit in her name. Every year, like clockwork, he added more money. He slept peacefully, knowing his money was "safe" in the bank. He could see the interest number grow slowly, predictably. It felt solid. It felt certain.
"At least I know my money is not at risk," he would tell me. "I can't bear the thought of losing even one rupee of her future."
The Sailing Ship of Mutual Funds
Then there was Mr. Fernandes. He too had a son, Rohan. He was equally afraid of risk, but he was more afraid of his money not growing fast enough. He saw the rising costs of college fees and hostels. He knew that being "safe" could sometimes be the biggest risk of all. So, he started a small, monthly SIP in an equity mutual fund for Rohan's education.
The journey wasn't always smooth. Some years, the value of his investment went down. His wife would worry, but he would remember the captain of a ship. The ocean has waves, but the ship still reaches the shore. He stayed the course, investing month after month, year after year.
The Day of Reckoning
Eighteen years flew by. It was time for college admissions. Mr. Joshi went to the bank to break his FDs. He was proud of the discipline he had shown. But when he calculated the total, his heart sank. The money, though safe, had not even doubled. The rising education costs had sailed far, far ahead of his savings.
Mr. Fernandes, however, logged into his investment account. He was astonished. Despite the ups and downs, his disciplined SIP had grown into a sum that was more than five times what he had put in. It was more than enough to cover Rohan's engineering degree at a top college.
Your Financial Lesson
My dear friend, both fathers loved their children. But one chose a path that only protected his money from loss. The other chose a path that protected his child's dream from inflation. The lesson is not that one is bad and the other is good. The lesson is in the balance.
- Safety has a hidden cost: The "safety" of an FD often comes at the cost of your money losing its purchasing power to inflation over time.
- Time is your greatest friend: A long-term investment in equities, through mutual funds, can weather short-term storms and harness the power of compounding.
- Discipline beats timing: A small, regular SIP is a powerful tool. It doesn't require a large sum to start, just a strong will to continue.
- Define your goal clearly: Saving for a goal 15+ years away is very different from saving for a goal 3 years away. Your strategy must match the timeline.
- Don't let fear steer the ship: Fear of loss can sometimes cause a greater loss—the loss of a dream fulfilled.
The moral: A fixed deposit saves your money, but the right investment saves your dream.