16 Jun, 2017, 12:42PM UTC by Jaydip Mehta

You Earn Daily /Periodically ??
You Spend Daily /Periodically??
Do You Invest Daily /Periodically??
We earn to realize our dreams They may be owning a Car, a House or going on a Vacation. Besides these, we also need to work on setting up funds for our Children’s Education, their Marriage and our Retirement.
Achieving these objectives may seem like climbing Mt Everest, but it’s possible if you prepare for it – One Step at a time.

What is SIP?
Systematic Investment Plan (SIP) is a financial plan that helps you to create wealth, by investing small amounts of money every month, over a period of time. A Systematic Investment Plan (SIP) is a vehicle offered by mutual funds to help investors invest regularly in a disciplined manner, through small and periodic installments.

Why is SIP a Smart choice?

  • Helps in ensuring financial discipline for us.
  • Helps you prioritize investing above spending.
  • Helps you invest at all prices getting an average low cost of investment
  • Help you reduce your risk as costing becomes lower.
  • Removes emotions for regular investing.

Let’s say you invested Rs. 10000 every month and let’s assume the mutual fund you invested in is available at a unit cost of Rs. 20 per unit. Then in 1st month , you will be able to buy 500 units. In the 2nd month , assume that the unit price goes down to Rs. 10 then you will be able to buy 1000 units. So total you could buy for 20000 is 1500 units, giving you an average cost of Rs. 15 per unit.

However, if you had invested a straight amount of Rs. 20000 in the first month when the unit price was Rs. 20 per unit,  you would only have bought 1000 units at one price of Rs. 20.

Hence in the first case which is SIP, you average out your cost and thereby reduce risk resulting in generating better returns.

Helps in compounding your wealth

Getting rich is simpler than you think, here’s a simple formula that can help:
Early Start + Regular Investments = Wealth creation

Invest Regularly

Systematic investing has a compounding effect on your investments. In the long term, a small amount of investment as low as Rs 1000/- per month can swell up into a huge corpus.

Start Early

Similarly, starting your investments early also has its own advantages. Starting early means that the power of compounding starts acting on your money earlier, thereby potentially generating better returns.
Consider the following graph:

If you start your investing Rs. 1000 per month and do so for 25 years you would have invested around Rs. 4,20,000 . now assuming an average return on investment @ of 10 per anum the corpus would become a whooping Rs 40,00,000 /-
On the other hand, if the you delay your investing in the same mutual fund by 5 yrs, then your corpus after 20 years reduces significantly to approx Rs. 15 Lakhs.

We can help you as an NRI to start your investments in mutual fund and help you save and get better returns in India then in the country of your stay. So contact us now to know more
Contact us to start your SIP.

Leave a Reply

Your email address will not be published.


Contact Us