Small investments can double your money
Systematic Investment Plan is the best way to invest in SIP equity mutual funds. You can also start with a small investment of Rs. 500 per month.
Sometimes you may hear your friends or acquaintances talking about small investment plans (SIP). He's closing his SIP or are starting SIP. The question is, after all, is this sip (SIP)? And what are the benefits? Due to which it has become so popular among investors.
What is SIP?
Systematic Investment Plan is the best way to invest in SIP equity mutual funds. You can also start with a small investment of Rs. 500 per month. In fact, sips average the purchase value of mutual fund units. This gives you better returns in the long term.
Investing through SIP significantly reduces the risk associated with market volatility. When the market booms, you are allotted fewer units, and when the market falls, you get more units in the same amount of investment.
What are the benefits of SIP?
1. Regular investment habit
If you have already decided that an investment will be made in a fund on the 10th of the month, sip sips make you used to regular investments. Sip is the best strategy for you if you are salaried and save only a few thousand rupees every month. A few thousand rupees are deducted from your account every month and it raises a lot of capital in the long run.
2. Investment in average value
If a mutual fund has a high Nav at some point of time, you will get fewer units on investment, but if the nav of the fund is low at that time, the same amount of units is available. This way, sips help you invest at an average price.
3. Get the benefit of compounding
The best aspect of sips is that it benefits from compounding, i.e., you also get returns on returns you get every month. This makes your capital grow quite fast. For example, if you invest Rs. 2,000 per month in an MF scheme and you get a return of 12 per cent per annum, you will get Rs. 9,51,863 from it fifteen years later.
Add sip to your financial target
You can link SIP to your financial targets, such as buying a house, raising funds for children's education, raising money for post-retirement. Set a target for everything and then estimate how many funds you need. Then the investment should be fixed accordingly. Only when your goal is set can you choose a good asset combination for it. You'll also know how much you have to save every month.
Set investment options by time
Setting an asset mix will also depend on how much time you have to achieve that goal. If you have more time, you can plan your own by exposing more in equity and less on a date. Because too much time gives you the ability to take more risks. If you have less time, it's better to focus more on the date option.
Increase sip amount every year
If you think your child's marriage will cost Rs 10 lakh and you are planning to marry her 15 years from now, you'll have to raise Rs 30 lakh for this work. They are assuming that inflation will continue to rise at the rate of eight per cent per annum. If you want Rs. 30 lakhs in 15 years, you will have to save about Rs. 6500 per month. If it returns at the rate of 12 per cent.
Start with a low amount first and then increase the amount slightly. Increase the amount of sip as the income increases every year.
Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you
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