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Hip Hop…Hurray up… Valentine day is again here today this year. You may be squeezing your mind about a special gift to your valentine. Think differently and gift a sip today.

What is SIP?

The SIP or Systematic Investment Plan is a hassle-free mode of investing money in Mutual Funds. This will allow you to invest a small amount every month over a specific period.

Three reason why SIP is a better investment

Discipline : The sip investment brings in discipline in creating your wealth. Once you start the sip in a mutual fund for a specific amount, period and the day in which the sip should go. The specified amount will be debited from the bank automatically and invest in mutual funds. This is hassle free and without even your interference the money will be invested in Mutual Funds.
Cost of Averaging : The market volatility brings advantage to the sip investments as your money would be invested in various market levels. For example, if you are investing Rs.5000 this month in a specific mutual fund scheme having an NAV of Rs.20 this month, then you will get 250 units. If the same amount invested next month assuming the NAV of Rs.15, then the no. of units accumulated would be 330 units. Hence Rs.5000 invested for two months, the accumulated units would be 580. On the long term, the cost of averaging helps you reducing risk resulting in a better return.
Start Early to compound your Wealth: The compounding effect is the main advantage of sip. Let me explain what is compounding effect. Assuming Vipul investing Rs.5,000 a month from his age of 21 till 30 years and stay invested till his retirement. The total investment made by Vipul is Rs.6 Lacs. The accumulated corpus is Rs.3.45 Crs at his age of 60.
On the other hand, Rahul started his investment at his age of 31 and continue his monthly investment of Rs.5000 per month until his 60 years of age. The overall investment made by Rahul is Rs.18 Lacs. The accumulated corpus is Rs.175 Crs at his age of 60.
Thus, starting early gives a comfort of compounding better and the amount of investment required to achieve a huge corpus also is lower.

We have assumed the growth rate of 12% per annum in both the cases.

Finally, it is very easy to start a sip. All you need to do is just login to wealthladder.co.in and provide your details. Our advisors will help you start the sip today.

Gift a sip today and keeps the financial worries away.