Plan to buy a superbike in 2021


For many, owning a superbike seems to be next to impossible; and there are various factors for it too – the traffic and road conditions here, caring for such engineering masterpieces, and the most important factor for many is the money required to indulge in such extravaganza.

Yes, superbikes do cost a lot and some might argue that the same amount of money could make them own a sedan that would be beneficial for the entire family. However, there are some dreams that worth fulfilling and owning a superbike is one of those. Suzuki Hayabusa, BMW S 1000 RR, Ducati Panigale V4, Kawasaki Ninja H2 and Kawasaki Ninja 1000SX are some of the superbikes whose prices vary from Rs. 16 lakh to Rs. 88 lakh. With careful money management practices and inculcating smart investment habits, it is possible to buy such premium marvels.

How to buy a superbike?

You can buy a superbike by saving a part of your salary for a few years. But, it would take you much longer to reach your goal, and your money value depreciates with time. Another good option is to start investing your savings in the stock market or mutual funds.

Where to invest?

Each investment avenue gives a different rate of return, subject to external conditions. Before you take any investment decision, study a random sample of mutual funds and try investing in funds that offer an average of return of 11% or higher. If you are a risk-averse investor, you could opt for debt funds as they offer comparatively better returns than traditional investment options like bank deposits. If you have a high-risk appetite, you could invest in equity funds or instruments that offer relatively higher returns.

Wondering how investing in mutual funds and stocks can help?

Let us assume that the superbike you dream of buying is priced at Rs. 12 lakh currently and that you have narrowed down on a mutual fund that offers an approximate return of 12.5% annually. 

  1. Invest around Rs. 10,000 per month in that mutual fund
  2. Every year, increase the investment amount by 10%. That means the second-year first-month investment would be Rs. 11,000. Repeat the step till the 7th year
  3. By the end of 7th year, investment value would be around Rs. 17 lakh
  4. Out of this Rs. 17 lakh, around Rs. 11 lakh would be your investment amount, and the remaining Rs. 6 lakh would be the interest amount
  5. Initially, you planned for Rs. 13 lakh, but the final amount stands at Rs. 17 lakh. In 7 years, superbikes’ cost may increase, so this extra amount could act as a buffer.

Working towards fulfilling your dreams

The higher the investment amount, the faster you could achieve your goals. Another factor that comes into play is the duration of your investment – if you invest for a longer time, your investments can offer better returns because of the compounding effect.

If you plan to start your investment journey, do so under the guidance of a financial advisor who can understand your investor profile and suggest stock & mutual fund investment plans that are unique to you.