SYSTEMATIC INVESTMENT PLAN
All of us have dreams. Some big, some not so big. Be it having a house of your own or providing the best education for your children or taking that dream holiday. You can actually fulfil them by investing small amounts regularly. The secret to its success is to start early and continue religiously. As you know time is money. The earlier you start making your money work for you, the better it is for you.
Systematic Investment Plan helps you make your money work harder for you. Through SIP, you can invest small amounts of money at regular intervals that will ultimately add up to a lot in the long term.
The benefits of using the SIP are threefold:
- It disciplines you to save regularly rather than randomly.
- It brings down the average cost per unit.
- It helps reduce the risk of timing the markets.
Here's how it works
Let us suppose there are two friends Ajay and Vijay. Ajay, on one hand, has saved Rs. 2000 a month for 20 years from the age of 24 in an investment instruments that generates a hypothetical return of 11 % per annum. After 20 years of investing, he ceases to invest. Vijay, on the other hand, starts saving Rs. 5000 per month from the age of 40 for 20 years. Who do you think would have earned more ? If you think it is Vijay, then you are mistaken ! For while Vijay's investments would have made Rs. 43.76 lakhs at the age of 60, Ajay's systematic and regular investments would have made Rs. 1.01 crore at the age of 60 !! Its time in the market & not timing the market that matters on your earnings or returns. SIP is a great instrument to help you create wealth. And the best way to avail of it is by investing in an Equity Growth Plan. A well-diversified equity fund, the Growth Plan is ideal if you are looking for the possibility of long term returns and are not too averse to the fluctuations of the stock market.
Revolve this wheel to check Investments and Returns