Why your next vacation could be your best investment

“Travelling is the only thing you buy that makes you richer.” This quote was displayed at the arrival gate of Cape Town International Airport when I landed there on holiday in 2022. 

Being an investment advisor for more than two decades, I was able to relate to this very much. 

I have always loved to travel and have been consistently travelling around the world for quite some time now. 

I think most of us like to travel around the world and for that, we need money, time, courage and, of course, health.

Funding your travel

When I was in my thirties, the money needed to travel was the biggest challenge. 

In the course of time, me and my brother started Navion Wealth in 2005, an investment advising firm. 

We were advising clients on their investment management. The next year I happened to discuss this with my close friend. 

During that time, the interest rates offered by the banks were meagre and he was not satisfied with that. 

So, I proposed that I could borrow a lump sum amount from him for an interest rate that was higher by 2% than the prevailing FD rates.

Our idea was to invest this in mutual fund equity schemes and utilize the surplus generated for seeing the world. 
We invested this amount and at the end of one year, we had a surplus amount after one year. 

And we travelled to Malaysia on a week-long holiday. The next year also was good and this time we visited Singapore. 

Subsequently, we made decent profits but, since the market was too high and risky, we redeemed the amount and paid back the loan.

Lump sum investment

During the great crash of 2009, we invested a lump sum amount as a travel fund. 

Since then, we always had some amount invested in equity funds, the returns of which we used for travelling the world. 

The cost of travel is increasing drastically with time. Increasing aspirational levels are also adding to the travel costs for the upper middle class. 

But the younger generation is ready to spend on experiences rather than assets. Their influence is making the general population think similarly.

Setting a goal

I had a client in his late seventies who managed to build his portfolio sizably with us. 

We suggested using a part for travelling abroad in 2018, which we did. We were apprehensive about how he would enjoy the company of others and the strain of travel. 

To our surprise, not only did he enjoy that trip, but he also started travelling regularly abroad twice a year.

Many a time, people set goals and invest for various needs, like a house, retirement, children’s education, and marriage. 

We advise them to set aside an amount and invest it in travelling as well. 

For a family of three to four members, investing anywhere between twenty to twenty-five lakh rupees will serve the purpose. 

This also inspires one to explore travel possibilities and dream of vacations. 

If one cannot afford to invest a lump sum, systematically investing on a monthly basis is also good.

I believe the spending I have done on my travels has made me richer. It changed my perspectives, aesthetics and broadened my mental health horizons. Happy travel!

(The author is the Director of Hanhold Consulting Pvt. Ltd. E-mail: [email protected] Web: www.hanhold.com Tel: 6238601079)

*This article was originally published in Dhanam Business Magazine.