This is the concept of having invested
a large lumpsum whereby the interest income or returns generated would be enough for the essential expenses for a year.
The builder of a new home or seller of an existing home may «buy down» the veteran's mortgage payments by making
a large lumpsum payment up front at closing that will be used to supplement the monthly payments for a certain period, usually 1 to 3 years.
Not exact matches
Liquid / ultra short funds are for
lumpsum deployments to mid-cap &
large cap when markets are down.
If I have a
lumpsum money (any amount for that matter), I would diversify between Equity (again on
Large and Mid-cap) and Liquid based on my risk appetite.
For example, If I have 30 lakhs
lumpsum money to invest, I have 2 options: One is open SIP in say
large cap, midcap, diversified mutual funds and invest 50,000 monthly thru SIP... this will take me 5 years to invest my 30 lakhs into Equity mutual funds..
Easy to handle the claim amount, takes care of inflation, address
larger needs using
lumpsum amount
Conversely, for contracts costing an equal
lumpsum and having the same internal rate of return, the longer the period between payments, the
larger the total payment per year.