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SIP Investment

Only have small amount of money to save? If financial planning experts are to be believed, SIPs are one of the greatest ways to save money that ends up 99% of your potential financial problems.
Systematic Investment Plan is an option where you invest a fixed amount of money in a mutual fund at regular intervals that can be monthly or quarterly.

Investing in SIP endeavour an investor to harness the following benefits:
  • Disciplined savings
  • Flexibility in investments
  • Reap benefits of initiating early
  • Rupee Cost Averaging - Benefit from Volatility
  • Power of Compounding - Small investments create Big Kitty over time
  • Easy on pockets, as investing is as low as 1,000 monthly

Investor can choose the SIP in different products like:

  • Equity
  • Debt
  • Gold
  • Hybrid Funds
  • Balance Funds

Power of compounding:

The concept of power of compounding comes into picture when Investment through SIP happens at regular interval with loner time frame. The power of compounding underlines the essence of making money work if only invested at an early age. Saving a small sum of money regularly at an early age makes money work with greater power of compounding. 
Let's take an example,

SYSTEMATIC INVESTMENT PLAN(SIP)

Age of Investment ( Start)

25 years

30 years

Monthly Investment

5,000

5,000

No of years

35

30

Total Investment

 2,100,000

1,800,000

Rate of Returns

15%

15%

Corpus Built

73,385,901

34,616,398

If we look at the above calculation, we can see that the contribution of Rs. 3 lakh done in first five years actually have a significant impact on Overall wealth creation.

SIP's inculcate a savings habit in investors on a regular basis and help them in a long run to amass great wealth.